* U.S. crude, gasoline inventories drop- API
* Cold weather continues to support
* Coming Up: EIA oil inventory data; 1530 GMT
By Rebekah Kebede
PERTH, Dec 22 Oil prices rose on Wednesday to
hover just below $90 a barrel, supported by data showing a
drop in U.S. oil and gasoline inventories, a winter cold snap
in the United States and Europe amid thin trading volumes.
U.S. crude for February CLc1 climbed 10 cents to $89.92
a barrel by 0248 GMT. ICE Brent crude LCOc1 rose 17 cents to
American Petroleum Institute data released late on Tuesday
in the U.S. showed a large 5.8 million barrel decline in
weekly crude stocks, surpassing analyst expectations.
"Big drops in crude oil and gasoline inventories in the
API data pushed the oil market to the up. But buying interest
around this level, around $90 a barrel, is not so large, "
said Ken Hasegawa, a commodity derivatives manager at Japan's
API data also showed an unexpected 2.9 million barrel fall
in gasoline inventories.
The U.S. Energy Information Service will release its U.S.
inventory data at 1530 GMT on Wednesday.
Oil prices were also supported by chilly weather in
northern Europe and the United States, which has increased
heating fuel demand. U.S. heating oil demand was expected to
average 4.6 percent above normal this week. [ID:nSGE6BJ05E]
AccuWeather.com expects temperatures in the U.S. northeast
to average mostly below normal for the next week, with
slightly milder readings late this month.
Thin trading volumes lent further support to oil prices.
"Ahead of the long Christmas holiday, there are relatively
fewer participants. Therefore, it is possible to extend gains
through the night on thin volumes, but I don't think the
market is that bullish," Hasegawa said.
The U.S. dollar fell slightly against a basket of
currencies. A weaker greenback supports dollar-denominated
commodities such as oil, making it cheaper for those holding
(Editing by Himani Sarkar)