Oil rises ahead of US fuel inventories

LONDON, Nov 15 (Reuters) Oil rose on Wednesday but stayed within a six-week price range ahead of data expected to show comfortable fuel inventories in the United States as mild weather kept heating needs low.

US crude was up 18 cents at .46 a barrel by 0945 GMT, reversing the previous day's losses and staying within the - band that has mostly bound prices since early October.

London Brent crude was up 29 cents at .13.

US heating oil stocks were about seven percent higher than at the same time last year, and this week's inventory data was expected to reflect relatively mild weather in the U.S.

Northeast, the world's largest heating oil market.

US distillate stocks, which include heating oil, were forecast to have fallen 400,000 barrels last week, a Reuters poll of analysts found.[EIA/S] The small fall was unlikely to pull oil prices out of their six-week rut, analysts said.

''Oil markets remain unconvinced about fundamentals firming,'' said UBS analyst Jan Stuart.

Stuart said quickening oil demand growth and moves by OPEC's top producers to cut back supplies as part of the group's 1.2 million barrels per day (bpd) curbs should help draw down inventories, but traders have lately been more preoccupied with concerns about the global economy and OPEC compliance.

Top exporter Saudi Arabia has led producers in cutting supplies to adhere to OPEC's accord, and has extended curbs imposed from Nov. 1 through December for customers in Europe and the United States.

Due to the time it takes for shipments to arrive in the United States from the Gulf, it will be some time before inventories in the world's largest consumer show how much OPEC members have adhered to their pledge to cut output from Nov. 1.

But the group's moves have put a halt to the sharp decline in oil prices from July through October. Oil lost about 25 percent during that period partly due to healthy global stocks.

The rangebound trading has led some speculators to pull out and look for bigger returns elsewhere, analysts said.

''Partly as a result of a lack of price action, speculative net length in the petroleum market has disappeared,'' Merrill Lynch analyst Francisco Blanch said in a report.

Speculators have cut the number of positions betting that oil product futures and options would rise to the lowest level since December 2004, Blanch said.

REUTERS KR HT1555