* U.S. crude falls back after 9 straight session gains
* U.S. API and EIA oil inventory data in focus
* European stocks turn lower, dollar recovers losses
(Updates throughout)
By Joe Brock
LONDON, July 28 (Reuters) - Oil eased towards $68 a barrel
on Tuesday, snapping nine straight sessions of gains, the most
sustained rally since prices hit record highs in July last year.
U.S. oil futures had closed higher for nine sessions running
before Tuesday, based on Reuters continuation charts, in the
most consecutive daily gains since prices hit a high of $147.27
in July 2008.
U.S. crude <CLc1> fell 67 cents to $67.71 a barrel by 1202
GMT, after rising to $68.99 on Monday, the highest since July 2,
spurred by robust U.S. homes sales data.
London Brent crude <LCOc1> fell 58 cents to $70.23 a barrel,
off an earlier four-week high at $71.36.
Christopher Bellew, a broker at Bache Commodities said
equity markets were putting pressure on oil prices on Tuesday.
"Stock markets are lower. It is a combination of stock
markets not being able to deal with high oil prices and
continuing bearish corporate (results) and economic data,"
Bellew said.
Two of Europe's biggest banks, Deutsche Bank <DBKGn.DE> and
Spain's BBVA <BBVA.MC>, braced for the economic slump by
increasing bad loan provisions in the second quarter.
[]
The banking woes helped to push European shares down on
Tuesday, after the FTSEurofirst 300 <FTEU3> hit its highest
close on Monday since November 10 2008. []
Meanwhile, the U.S. dollar recovered from 2009 lows on
renewed risk aversion.
Oil company BP <BP.L> reported a mixed set of second-quarter
results on Tuesday. BP is the first of the top tier of Western
oil companies, known as the five Supermajors, to report their
second-quarter results. []
Although BP's second-quarter profits halved, oil and gas
production was up 4 percent and its cost saving target was
raised to $3 billion, from $2 billion. []
INVENTORIES
Investors were awaiting U.S. weekly oil inventories in which
a Reuters poll forecast a 300,000-barrel drop in crude stocks
and a 600,000-barrel fall in gasoline. Distillates stocks are
projected to have risen by a hefty 1 million barrels. []
"The inventory data could definitely be market moving
overnight especially when refiners have shut down some capacity
due to maintenance work," said Carsten Fritsch, oil analyst at
Commerzbank.
The American Petroleum Institute data is scheduled for late
Tuesday, while the report from the U.S. Energy Information
Administration (EIA) is due out on Wednesday.
The chief executive of state oil giant Saudi Aramco
expressed confidence on Tuesday the global fall in oil demand
was temporary and that consumption growth would eventually
resume. []
Khalid al-Falih also said in comments published in the
al-Hayat newspaper that oil output capacity touched 12 million
barrels per day last month when three new oilfield projects
started, one of which is the Shaybah oilfield expansion.
Investors were awaiting with caution Friday's U.S. GDP data,
expected to show a fourth-straight quarter of contraction.
U.S. crude oil is expected to average nearly $73 a barrel in
2010, a Reuters poll showed on Tuesday, as oil demand improves,
albeit at a sluggish pace. []
(Editing by Peter Blackburn)
