(Recasts, updates prices)
By Annika Breidthardt
SINGAPORE, April 16 (Reuters) - Oil fell under $114 a
barrel on Wednesday and below the previous day's record highs ,
as initial dollar gains gave way to investors' caution ahead of
major U.S. banks' earnings and concerns over credit turmoil.
U.S. light crude <CLc1> for May fell 20 cents to 113.59 a
barrel by 0730 GMT, off Tuesday's record high of $114.08, but
still up nearly four-fifths from a year ago.
London Brent crude <LCOc1> for the new front-month of June
fell 17 cents to $111.41.
The weak dollar -- together with strong demand -- has
driven oil and other commodities such as corn, gold and rice to
record highs in recent months, as investors and speculators
have sought a hedge against inflation.
"The dominant factor continues to be the U.S. dollar and I
expect this to continue for a while," said Gerard Rigby, an
analyst at Sydney-based Fuel First Consulting.
"Whenever you get any kind of good economic news out of the
(United States) at the moment, the dollar will rise and oil
falls, and the other way round, you get a new oil record," he
added.
The dollar steadied against the euro on Wednesday after
earlier rising on robust U.S. inflation and manufacturing data
that suggested the U.S. Federal Reserve may be less aggressive
in cutting interest rates.
But it slipped against the yen, hurt by caution ahead of
quarterly earnings announcements by major U.S. banks and
worries about the turmoil in credit markets. []
CHINA DEMAND
Lifting some concerns over a supply squeeze, Mexico, a
major supplier to the U.S., reopened its three main Gulf of
Mexico oil ports as bad weather cleared, the government said.
[]
Only a smaller Pacific port remained shut.
But in a sign that consuming countries were still concerned
about a supply shortfall, Britain's prime minister Gordon Brown
on Tuesday called on the Organization of the Petroleum
Exporting Countries to boost production to counter rapidly
rising prices.
OPEC, which pumps more than a third of the world's oil,
said late on Tuesday it was supplying enough oil and the U.S.
economic slowdown may weaken consumption in the second quarter,
underscoring its reluctance to raise supply. []
Demand in the world's top consumer may be losing steam.
U.S. crude oil imports fell in February to the lowest level in
a year.
They declined by 486,000 barrels per day (bpd), or 4.9
percent, from the month before to 9.514 million bpd, the
federal Energy Information Administration said. []
But China's diesel imports rebounded in March to 490,000
tonnes, up some 49 percent from a month earlier, and remained
robust in April and May, as the government extended a tax break
on imported fuels. [] []
China's economy grew 10.6 percent in first quarter, the
National Bureau of Statistics said, slower than the 11.2
percent in the fourth quarter, but stronger than forecast of
10.0 percent, underscoring the resilience of the world's
fourth-largest economy despite fierce winter weather and a
global credit crunch. []
U.S. crude oil inventories likely rebounded last week, with
an increase in imports lifting supply, following a surprise
drawdown the week before, a Reuters poll of 14 analysts showed.
But gasoline stocks probably fell for the fifth week running.
[]
(Editing by Ramthan Hussain)
