* Oil hit by decline in equities as investors shun risk
* Brent premium to U.S. crude widest since mid-May
* Coming Up: API U.S. oil inventories at 2030 GMT
(Adds European comment, updates prices; previous SINGAPORE)
By David Turner
LONDON, Sept 8 (Reuters) - Oil fell for a third straight
session on Wednesday, with the U.S. benchmark hit by weakness in
equity markets.
Japan's Nikkei average fell 2.2 percent on renewed concerns
about European banks and the global economy, which pulled Asian
stock markets down from one-month highs reached on Tuesday.
<> [] European equities declined more moderately in early
trading. <> [] The MSCI All Country World Index was
also slightly down on the day. <.MIWD00000PUS>
U.S. crude for October <CLc1> fell 54 cents to $73.55 a
barrel by 0830 GMT.
Traders attributed the decline in benchmark U.S. crude to
the weakness in share prices, which have been highly correlated
with oil prices for most of 2010 because both are seen by funds
as indicators of the strength of global economic recovery.
Eugen Weinberg, commodities analyst at Commerzbank in
Frankfurt, said: "Today oil is a little bit under pressure from
weakness in equity markets worldwide."
BRENT-U.S. CRUDE SPREAD
U.S. crude is trading at a steep discount of $3.65 to
futures based on the European Brent benchmark <LCOc1>. The gap
reached a peak of $3.91 earlier in the day, its highest since
mid-May. Brent was 57 cents down on the day at $77.17.
Weinberg said U.S. crude's discount to Brent was "definitely
due to investment outflow, weaker demand, and high oil
inventories (in the United States)."
However, he added: "A price difference of up to $4 is too
much", since both contracts were "linked to the same world
market.
Total U.S. petroleum stockpiles are at their highest since
weekly records began in 1990.
For a graphic on Brent's premium to WTI, click:
http://graphics.thomsonreuters.com/AS/0810/ABE_20100809105935.jp
Maintenance at North Sea fields and a strong Urals crude
market have also contributed to Brent's premium.
However, U.S. crude inventories fell for the first time in
three weeks last week, down by a moderate 600,000 barrels, as
refineries reduced imports in preparation for stormy weather,
according to a Reuters poll on Tuesday. []
Weekly U.S. industry and government statistics on
inventories will be delayed by one day this week, to 2030 GMT on
Wednesday for the American Petroleum Institute and to Thursday
for the Energy Information Administration. []
The poll also forecast a 700,000 barrel increase in
stockpiles of distillates, including heating oil and diesel
fuel, and a 900,000 barrel decline in gasoline supplies.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
