* Oil pares earlier losses, falls to around $74
* Brent premium to U.S. crude widest since mid-May
* Coming Up: API U.S. oil inventories at 2030 GMT
(Adds analyst quote, graphic, updates prices)
By David Turner and Marie-Louise Gumuchian
LONDON, Sept 8 (Reuters) - Oil fell to around $74 a barrel
on Wednesday, declining for a third straight session, but
gaining European equity markets helped pare losses.
European shares rebounded from earlier losses, leaving the
pan-European FTSEurofirst <> up 0.75 percent. The day's
trading, however, reflected the skittishness that has dominated
markets over the past few months. []
The MSCI All Country World Index was slightly down on the
day. <.MIWD00000PUS>.
U.S. crude for October <CLc1> fell 22 cents to $73.87 a
barrel by 1138 GMT, having hit an earlier low of $73.37.
Share prices have been highly correlated with oil for most
of 2010 because both are seen as indicators of economic health.
Oil gained support on Wednesday from a weaker U.S. dollar
<.DXY>, which makes oil cheaper for other currency holders.
"The dollar gave up some of gains and equity futures bounced
a little bit so that's why crude oil for now has erased some of
the losses," said Olivier Jakob of consultants Petromatrix.
The market is also awaiting the release of weekly U.S.
industry and government statistics on inventories, delayed by a
day following Monday's Labor Day holiday in the United States.
"It's well in a range of between $75 and $80 and we need
some strong news to push prices out of this range," Christophe
Barret, an oil analyst at Credit Agricole, said.
"Last week's data was a bit weak and this week will be
interesting as it will reflect what happened just ahead of the
Labor Day weekend."
BRENT-U.S. CRUDE SPREAD
U.S. crude is trading at a steep discount of $3.30 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 50 cents down on the day at $77.24.
Eugen Weinberg, commodities analyst at Commerzbank in
Frankfurt said U.S. crude's discount to Brent was "definitely
due to investment outflow, weaker demand, and high oil
inventories (in the United States)."
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/gfx1/DTR_20100809113449.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Maintenance at North Sea fields and a strong Urals crude
market have also contributed to Brent's premium.
However, U.S. crude inventories probably 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. []
The American Petroleum Institute will publish its weekly
U.S. industry statistics on inventories at 2030 GMT on Wednesday
with the Energy Information Administration publishing government
figures on Thursday.
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 and Alex Lawler)
