Oil gains slightly on weak dollar
Crude prices step higher as dollar remains under pressure and and Chinese demand growth and factory output increase.
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LONDON (Reuters) -- Oil rose modestly Wednesday, responding to a 15-month low in the dollar and robust Chinese demand growth and factory output.
Analysts said the gain was capped by weak demand elsewhere and a relatively quick recovery of the U.S. oil industry after storm disruption.
U.S. crude futures rose 10 cents to $79.15 a barrel.
"Only the dollar may push oil prices around. The Chinese manufacturing data was good, which is bullish. We are still in a hurricane aftermath, which is bearish," said Andy Sommer, senior oil analyst with EGL Group.
The dollar on Wednesday hit its lowest in 15 months against a basket of currencies.
China showed robust demand growth. Its October crude oil imports and refinery runs rose to near record highs while its industry output growth surged to a 19-month high.
Oil and natural gas companies operating in the Gulf of Mexico began returning workers evacuated ahead of Tropical Storm Ida and restoring shuttered output and ports. Oil prices have risen about 77% so far this year, but are still 46% off their high of more than $147 a barrel struck in July last year.
Globally, oil demand remains sluggish.
Producer group OPEC raised its forecast for world oil demand growth slightly in its report on Wednesday. But it said fuel consumption may not return to levels seen before the global economic slowdown, even if growth recovers.
The next clue for fundamentals will be released from top consumer United States on Thursday. Weekly oil figures from the Energy Information Administration (EIA) has been delayed by one day due to the Veterans Day holiday.
Analysts in a Reuters poll forecast the data would show a 600,000 barrel increase in U.S. crude inventories last week as refineries have been cutting back runs as weak demand batters margins.
Separate data from industry group American Petroleum Institute late Tuesday showed increases in crude, gasoline and heating oil inventories.
In Europe, crude oil inventories rose in October as refiners reduced operation rates to match falling demand.
Oil products, mostly heating oil, for which storage cannot found on land, are floating in ships at sea. The volume is now about 90 million barrels, said ICAP shipping brokers, more than the world's daily oil consumption. 
