(Corrects paragraph six to show a weaker dollar raises the
purchasing power of buyers using other currencies)
* Dollar falls on risk demand, after housing data
* U.S. weekly crude stocks seen falling 1.8 million barrels
* No oil market price impact seen from Iran protests
(Updates prices)
By Chris Baldwin
LONDON, June 16 (Reuters) - Oil rose $2 to above $72 a
barrel on Tuesday as the dollar slid and U.S housing data
showed a jump in new construction starts and permits.
U.S. crude rose $2.07 cents to $72.69 by 1312 GMT, after
trading below $70 when the dollar was stronger.
London Brent crude rose $2.11 to $72.35.
"The housing data was quite good, but stock markets are not
shooting away just yet," said trader Robert Montefusco at
Sucden Financial. "The dollar is still the main crux of it."
The dollar fell broadly as higher European shares piqued
appetite for currencies seen as higher risk, and lost more
ground after the U.S. housing data.
A weaker dollar can strengthen commodity markets by
improving the purchasing power of buyers using other
currencies.
The Commerce Department said on Tuesday U.S. housing starts
jumped 17.2 percent to a seasonally adjusted annual rate of
532,000 units, from April's revised 454,000 units, and new
building permits rose 4 percent, the biggest advance since June
last year.
IRAN PRICED IN
Iran's top legislative body ruled out annulling a disputed
presidential election that has prompted the biggest street
demonstrations since the 1979 Islamic revolution, but said it
was prepared for a partial recount.
The world's fifth-biggest oil exporter has seen three days
of the largest and most violent anti-government protests in
three decades, though no disruption to Iran's 2.1 million
barrels-per-day exports have been felt.
"We've seen a downward spiral over the years in light of
sanctions in Iran's ability to bring projects online...it's a
slow trend that had pretty much been continuously priced in,"
said Samuel Ciszuk, analyst at IHS Global Insight in London.
Expectations of an economic recovery drove crude prices to
a near eight-month high above $73 a barrel last week.
Traders will look out for weekly U.S. government inventory
data on Wednesday, which is expected to show a 1.8-million
barrel fall in crude oil stocks, a 600,000-barrel rise in
gasoline stocks and 900,000-barrel rise in distillate stocks,
based on a preliminary Reuters poll.
The American Petroleum Institute (API) will issue its
report later in the day.
With oil rising almost $20 since the end of April, there
were concerns that speculation in the market had pushed oil
prices up too high, too fast.
OPEC Secretary-General Abdullah al-Badri said too quick a
rise in oil prices could harm a global economic recovery,
though a price of $80 a barrel would not stem growth.
The head of the International Monetary Fund, Dominique
Strauss-Kahn, also sounded a cautious note, saying on Monday
the worst of the global crisis was not yet over.
(Additional reporting by Chua Baizhen; Editing by Sue Thomas)
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