Oil hovers at $ 61 after gains on US fuel stock draw

TOKYO, Feb 23 (Reuters) Oil prices were little changed just below on Friday, after touching a more than seven-week high a day earlier as a sharp fall in U.S. fuel stocks and mounting anxiety over Iran's nuclear ambitions spurred buying.

U.S. crude for April delivery was trading 9 cents lower at .86 a barrel by 0244 GMT, after gaining 88 cents on Thursday and hitting a peak of .25, the highest since Jan. 2. London Brent crude for April was down 1 cent.

Prices have climbed nearly TOKYO, Feb 23 (Reuters) Oil prices were little changed just below $61 on Friday, after touching a more than seven-week high a day earlier as a sharp fall in U.S. fuel stocks and mounting anxiety over Iran's nuclear ambitions spurred buying.

U.S. crude for April delivery was trading 9 cents lower at $60.86 a barrel by 0244 GMT, after gaining 88 cents on Thursday and hitting a peak of $61.25, the highest since Jan. 2. London Brent crude for April was down 1 cent.

Prices have climbed nearly $2 in two days, boosted first by pipeline and refinery problems in the United States and on Thursday by news of an unexpectedly deep draw on fuel stocks.

U.S. distillate inventories, including heating oil, fell by 5 million barrels last week, the biggest weekly drop since September 2005 and much larger than the average 2.9 million barrel draw analysts had anticipated, data showed.

U.S. gasoline supplies unexpectedly fell 3.1 million barrels, sending NYMEX RBOB gasoline futures nearly 3 percent higher as traders began to fret about summer supplies. Crude stocks rose a larger-than-expected 3.7 million barrels.

''This data was quite strong, especially for heating oil,'' said Dariusz Kowalczyk, chief strategist at CFC Seymour Ltd. in Hong Kong. ''The risk is to the upside if the Iranian situation deteriorates a little bit, so just in case you buy.'' Oil traders' fear of a disruption in Gulf supplies grew this week after the United Nations nuclear watchdog said Iran failed to meet a Feb. 21 deadline to suspend uranium enrichment.

Washington said major powers would meet next week to start writing a new Iran sanctions resolution.

A string of U.S. refinery problems and other operational snags also risks straining fuel supplies in the top consumer.

A fire over the weekend at Valero Energy Corp.'s 170,000 bpd refinery on the Texas panhandle was expected to keep the plant shut for several weeks. Several other refineries were shut for repairs and regular seasonal maintenance.

TEPPCO told customers on Thursday it could restart the downed portion of its 240,000 barrels-per-day refined oil products pipeline by Friday morning, pending regulatory approval -- a day sooner than initially expected.

OPEC next meets in Vienna on March 15 to discuss output levels, but most members, including top supplier Saudi Arabia, have indicated that the cartel will leave output unchanged.

The group is on course to trim oil output in February by 500,000 bpd as members led by Saudi Arabia curbed supply further, consultancy Petrologistics said on Thursday.

REUTERS KR DB1127 in two days, boosted first by pipeline and refinery problems in the United States and on Thursday by news of an unexpectedly deep draw on fuel stocks.

U.S. distillate inventories, including heating oil, fell by 5 million barrels last week, the biggest weekly drop since September 2005 and much larger than the average 2.9 million barrel draw analysts had anticipated, data showed.

U.S. gasoline supplies unexpectedly fell 3.1 million barrels, sending NYMEX RBOB gasoline futures nearly 3 percent higher as traders began to fret about summer supplies. Crude stocks rose a larger-than-expected 3.7 million barrels.

''This data was quite strong, especially for heating oil,'' said Dariusz Kowalczyk, chief strategist at CFC Seymour Ltd. in Hong Kong. ''The risk is to the upside if the Iranian situation deteriorates a little bit, so just in case you buy.'' Oil traders' fear of a disruption in Gulf supplies grew this week after the United Nations nuclear watchdog said Iran failed to meet a Feb. 21 deadline to suspend uranium enrichment.

Washington said major powers would meet next week to start writing a new Iran sanctions resolution.

A string of U.S. refinery problems and other operational snags also risks straining fuel supplies in the top consumer.

A fire over the weekend at Valero Energy Corp.'s 170,000 bpd refinery on the Texas panhandle was expected to keep the plant shut for several weeks. Several other refineries were shut for repairs and regular seasonal maintenance.

TEPPCO told customers on Thursday it could restart the downed portion of its 240,000 barrels-per-day refined oil products pipeline by Friday morning, pending regulatory approval -- a day sooner than initially expected.

OPEC next meets in Vienna on March 15 to discuss output levels, but most members, including top supplier Saudi Arabia, have indicated that the cartel will leave output unchanged.

The group is on course to trim oil output in February by 500,000 bpd as members led by Saudi Arabia curbed supply further, consultancy Petrologistics said on Thursday.

REUTERS KR DB1127