Oil climbs near $71 on resilient US demand

LONDON, June 22 (Reuters) Oil climbed to near a barrel on Thursday after a smaller-than-expected rise in U.S. gasoline stocks reignited talk of resilient oil demand in the world's top consumer, pushing inflation worries to the back burner.

U.S. light crude for August rose 40 cents to .73 a barrel by 1300 GMT, adding to gains of nearly a dollar on Wednesday, amid a gasoline-led rally.

European benchmark Brent climbed 53 cents to .70.

Gasoline jumped 3 percent on Wednesday after U.S. government data showed a 300,000-barrel increase in gasoline stocks, despite an increase in refinery utilisation, against expectations of a bigger 1.2 million barrel rise. [EIA/S] July gasoline was last up 1.03 cents at LONDON, June 22 (Reuters) Oil climbed to near $71 a barrel on Thursday after a smaller-than-expected rise in U.S. gasoline stocks reignited talk of resilient oil demand in the world's top consumer, pushing inflation worries to the back burner.

U.S. light crude for August rose 40 cents to $70.73 a barrel by 1300 GMT, adding to gains of nearly a dollar on Wednesday, amid a gasoline-led rally.

European benchmark Brent climbed 53 cents to $69.70.

Gasoline jumped 3 percent on Wednesday after U.S. government data showed a 300,000-barrel increase in gasoline stocks, despite an increase in refinery utilisation, against expectations of a bigger 1.2 million barrel rise. [EIA/S] July gasoline was last up 1.03 cents at $2.0763 a gallon.

''The market has regained its appetite for commodities. They are bullish on gasoline and bullish about U.S. demand,'' said Deborah White, analyst at Societe Generale.

U.S. gasoline demand over the past four weeks stood at 9.41 million barrels per day, up 0.9 percent from a year ago.

''In all, the rumours of the demise of U.S. demand seem to be premature,'' Barclays Capital said in their weekly report.

The market shrugged off a 1.4 million-barrel rise that pushed U.S. crude oil stocks to their highest in eight years.

The build was concentrated mainly in the U.S. West Coast, which statistically is less significant than the energy-hungry East and Gulf coast regions.

U.S. DEMAND CONCERNS EASE The data partly quelled concerns that tighter U.S. monetary policy could dampen oil consumption in the world's top oil user, although the picture is different for other big consumers.

In Japan, the world's third largest oil user, crude imports in May plunged by more than a quarter versus April to their lowest level in two years as refiners shut down for heavy spring maintenance, government data showed. [nT44337] West African crude sales to Asia for July-loading dropped to their lowest levels in nearly a year as Chinese refiners looked to reduce stock levels after demand failed to meet expectations, traders said. [nL22850554] The demand-supply equation remains fragile and prices have held in a $68-73 band for more than six weeks, resisting much sharper falls in other commodity markets as oil-specific geopolitical concerns limit the impulse to sell.

Tensions over Iran were rekindled on Thursday when the United States sought Iran's response to proposals to halt its nuclear enrichment programme by mid-July.

Iranian president Mahmoud Ahmadinejad said on Wednesday Tehran would provide an answer by Aug. 22.

(Additional reporting by Maryelle Demongeot in Singapore and Alex Lawler in London) REUTERS ARB KN1842 .0763 a gallon.

''The market has regained its appetite for commodities. They are bullish on gasoline and bullish about U.S. demand,'' said Deborah White, analyst at Societe Generale.

U.S. gasoline demand over the past four weeks stood at 9.41 million barrels per day, up 0.9 percent from a year ago.

''In all, the rumours of the demise of U.S. demand seem to be premature,'' Barclays Capital said in their weekly report.

The market shrugged off a 1.4 million-barrel rise that pushed U.S. crude oil stocks to their highest in eight years.

The build was concentrated mainly in the U.S. West Coast, which statistically is less significant than the energy-hungry East and Gulf coast regions.

U.S. DEMAND CONCERNS EASE The data partly quelled concerns that tighter U.S. monetary policy could dampen oil consumption in the world's top oil user, although the picture is different for other big consumers.

In Japan, the world's third largest oil user, crude imports in May plunged by more than a quarter versus April to their lowest level in two years as refiners shut down for heavy spring maintenance, government data showed. [nT44337] West African crude sales to Asia for July-loading dropped to their lowest levels in nearly a year as Chinese refiners looked to reduce stock levels after demand failed to meet expectations, traders said. [nL22850554] The demand-supply equation remains fragile and prices have held in a -73 band for more than six weeks, resisting much sharper falls in other commodity markets as oil-specific geopolitical concerns limit the impulse to sell.

Tensions over Iran were rekindled on Thursday when the United States sought Iran's response to proposals to halt its nuclear enrichment programme by mid-July.

Iranian president Mahmoud Ahmadinejad said on Wednesday Tehran would provide an answer by Aug. 22.

(Additional reporting by Maryelle Demongeot in Singapore and Alex Lawler in London) REUTERS ARB KN1842