Oil rises above $75 on US stock fall, Iran tension

SYDNEY, July 13 (Reuters) Oil surged near a record high on Thursday after a sharp fall in U.S. crude stocks, forecasts of accelerating demand growth from 2007 and an impasse in the diplomatic stand-off between Iran and the West.

U.S. crude futures climbed 42 cents to .37 a barrel by 0539 GMT, after a 79-cent rally on Wednesday. London Brent jumped 55 cents to .94 a barrel.

''The dramatic decrease in U.S. inventories is propping up the market and we're seeing an extension of the bullish sentiment which followed the numbers on Wednesday,'' said Dariusz Kowalczyk, senior investment strategist at CFC Securities in Hong Kong.

''But remember that the decrease is due entirely to lower imports, which can be very volatile from week to week,'' he said.

U.S. crude oil inventories slid 6 million barrels last week as imports fell nearly a million barrels per day (bpd), a government report said on Wednesday. The drop was five times larger than the 1.2 million barrels forecast among analysts polled by Reuters.

A shipping artery in Louisiana was closed for 10 days last month after an oil spill. Though it opened back up before the end of last week, the disruption may have continued to slow cargo deliveries to the region.

Gasoline stocks slipped 400,000 barrels, against a forecast decline of 100,000 barrels, on lower refinery production and as demand from the world's largest oil consumer remained strong.

U.S. motorists, who consume over 40 percent of the world's gasoline, bought 1.7 percent more fuel in the past four weeks compared with a year ago. The data covered the U.S.

Independence Day holiday weekend when annual gasoline demand peaks.

Heating oil inventories could tumble heading into the winter if refineries keep making gasoline due to the heavy demand and high pump prices, the U.S. government's Energy Information Administration (EIA) warned on Wednesday.

DEMAND GROWTH, SUPPLY WORRIES Despite near record-high prices, growth in oil demand will rise more quickly through to 2011 than it did in the past decade, the Paris-based International Energy Agency (IEA) said on Wednesday.

The IEA, adviser to 26 industrialised countries, predicted the world would need an additional 1.57 million bpd of oil to fuel economic growth in 2007, up from growth of 1.21 million bpd this year.

With demand forecast to burgeon, the threat to supply from a diplomatic battle between the West and the world's fourth-largest oil exporter Iran has also helped drive oil's 23 percent rally this year. Prices hit a record-peak of .78 on Friday.

''Where oil goes now depends on signals on Iran in the lead-up to the G8 meeting at the weekend,'' said CFC Securities' Kowalczyk. ''My guess is that prices are too high, and we'll see some steam come off, but it really depends on political news.'' World powers set Iran on a collision course with the United Nations on Wednesday, asking the Security Council to intervene after Tehran failed to respond to incentives aimed at ending the stand-off over its nuclear programme during talks with the European Union.

Iran has said it will respond to the package of incentives in late August. The U.S., which believes Iran is working to build nuclear weapons, had said it wanted a clear response before the Group of Eight rich nations meet in Russia this weekend.

Violence in the Middle East escalated as Israeli aircraft attacked Beirut airport on Thursday and killed 22 civilians in strikes on south Lebanon, widening its reprisals after Hizbollah captured two Israeli soldiers and killed eight.

REUTERS CS KP1230