SINGAPORE, Oct 3 (Reuters) Oil prices rose on Wednesday as traders bet a three-day profit-taking slump was overdone and looked ahead to US data expected to show crude inventories resumed their recent decline last week.
US crude rose 27 cents to $80.32 a barrel, reversing Tuesday's 19-cent loss. Prices had tumbled nearly $3 from a near record high late last week on concerns that the global credit crunch will stymie U.S. and European economic growth.
Brent crude rose 16 cents to $77.54 a barrel.
A rebound from record lows for the U.S. dollar added pressure to prices on Tuesday, as did revised data showing oil demand in the world's top consumer in July fell 0.5 percent from the year before, far weaker than initially reported.
''At this level prices are starting to hurt demand, especially in the developed countries,'' said Tony Nunan, a risk manager at Mitsubishi Corp. ''If you're thinking there's lower demand and higher OPEC output then why not take your profits now?'' The focus will shift later in the day to U.S. inventory data expected to show a 800,000 barrel decline in crude stocks after the previous week's unexpected rise in supplies, underscoring the anticipated increase in refinery usage after seasonal maintenance work and ahead of the peak winter demand season.
Distillate stocks, including winter heating fuel, are expected to have risen by 1 million barrels and gasoline supplies by 200,000 barrels, a poll of analysts found.
Prices also drew support on Tuesday from news that a fire at Suncor Energy Inc's oil sands project in Alberta had cut output by 85,000 bpd. The company said the fire was quickly put out but did not say when full output would resume.
Although much of the hurricane season has passed, oil traders also remain on high alert for any sign of foul weather that could disrupt oil production or refining in the Gulf of Mexico.
A stormy weather system in the eastern Gulf could form into a cyclone, but is not expected to affect energy operations, forecasters and company officials said.
The Colorado State University hurricane research team on Tuesday predicted two more Atlantic hurricanes would form before the end of the season. The six-month storm season normally runs until Nov. 30.
The price of oil has remained above $80 for much of the last three weeks, despite OPEC's agreement on Sept. 11 to boost output by 500,000 barrels per day from Nov. 1.
Qatar's oil minister brushed aside the need for the OPEC to raise output even further this week, saying speculative investment was responsible for $80-plus oil.
REUTERS sg ht0924