* Oil on track to fall for third day
* Euro hovers near four-year lows versus dollar
* Coming Up: U.S. API oil inventory report; 2030 GMT
By Emma Farge
(Changes dateline to LONDON, recasts)
LONDON, June 2 (Reuters) - Oil prices slid below $72 a
barrel on Wednesday and looked set to fall for a third straight
session after a raft of negative data stoked concerns about the
impact of the European debt crisis on the still fragile global
fuel demand recovery.
Investors have had less appetite for buying oil after a
series of reports released the previous day showed manufacturing
growth fell across the globe in May. []
Falling European shares and the euro's slide to near
four-year lows continued to quell buying interest on Wednesday.
[] <EUR=> A weak euro makes dollar-denominated oil more
expensive for holders of the currency.
U.S. crude prices for July <CLc1> fell 60 cents to $71.98 a
barrel at 1045 GMT, after losing nearly 2 percent on Tuesday in
a volatile session where prices swung in a $4 range.
ICE Brent <LCOc1> dropped 45 cents to $72.26 a barrel.
"The path of least resistance still seems to be lower for
energy prices given the headwinds emanating from a number of
exogenous markets. These include a weaker euro...and a quesy
U.S. equity market," said analyst Edward Meir of MF Global.
Sentiment in the oil market has been sour since U.S. crude
posted a 14 percent monthly loss in May as the market weighed
the impact of the spreading European debt crisis on demand in
previously robust growth centres such as Asia.
In late May, money managers flushed out long positions in
crude oil and this contributed to the sharpest monthly fall in
prices since 2008. []
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the performance of commodities so far
this year, see here:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
For a graphic showing the technical outlook for U.S. crude,
see here:
http://graphics.thomsonreuters.com/gfx/WT_20100206083914.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ But for some, prices have already found a temporary floor
and they now expect them to stabilise in a new range between
$70-$75 a barrel.
"We could have some stability. The current level takes into
account the fact that the recovery appears to be slowing but
also the fact that we are not going to have a double dip," said
analyst Christophe Barret at Credit Agricole CIB, adding that
the chances of a V-shaped recovery now seem remote.
Technical chart analysts think oil prices could fall towards
the next key support cushion of $70 a a barrel. []
This level is also the low point of the $70-$80 range that
the Organization of the Petroleum Exporting Countries (OPEC)
deems satisfactory for both producers and consumers.
OPEC's reference basket price on Tuesday was also above the
critical $70 threshold at $70.98 a barrel, the group said on
Wednesday. []
Analysts said the market was likely to focus on weekly
stocks data out of the U.S. later on Wednesday for the next clue
on demand prospects in the world's biggest oil consumer.
While the data is always a key market mover, this week's
results are likely to be more closely scrutinised ahead of the
U.S. gasoline season which officially began last weekend with
the Memorial Day holiday.
U.S. crude oil inventories are forecast to have slipped by
200,000 barrels last week and gasoline stocks are expected to
fall by 500,000 barrels. []
Industry group American Petroleum Institute will issue its
report at 2030 GMT on Wednesday while the more authoritative
data from the U.S. Energy Information Administration is delayed
until 1500 GMT on Thursday because of a U.S. holiday on Monday.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by James Jukwey)
