* Dollar raises oil prices beyond market fundamentals
-broker
* Technicals show oil rebound to 5-month high
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* Coming Up: U.S. API weekly oil stocks to Oct 15; 2030
GMT
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Oct 19 (Reuters) - Oil fell on Tuesday,
retracing part of the previous session's gain, as investors
reversed bets in the face of a stronger dollar and forecasts
for rising crude inventories in top consumer the United States.
U.S. crude for November <CLc1> fell 49 cents to $82.59 a
barrel by 0550 GMT, after climbing 2.25 percent on Monday, the
biggest percentage gain in two weeks, while ICE Brent for
December <LCOc1> declined 64 cents to $83.73.
The dollar rose by almost 0.6 percent against a basket of
currencies <.DXY> on Tuesday after U.S. Treasury Secretary Tim
Geithner said his country would not engage in competitive
devaluation. []
"The biggest problem that we've got is that whenever we get
comments about stimulus, the kneejerk reaction is quite simple:
sell the dollar and the price of commodities goes artificially
higher, driven by sentiment," said Jonathan Barratt, managing
director at Commodity Broking Services in Sydney.
"But it's a self-defeating attitude because commodities
have to be priced to clear. The economies are not good and
there is no immediate demand. If there was, why would we need
more stimulus?"
A Federal Reserve report on Monday said U.S. industrial
production fell in September, against analyst expectations it
would rise, while capacity utilization eased slightly. The
report was viewed as supportive of expectations for more
monetary easing. []
U.S. gasoline consumption fell 1.1 percent in the four
weeks to Oct. 8 from a year earlier, while the nation's total
oil demand rose just 0.8 percent, government statistics showed.
PRODUCTS MARKETS TIGHTEN
Although oil product markets were seen tightening due to
maintenance at American refineries and strike-idled plants in
France, U.S. crude stockpiles probably rose by 1.6 million
barrels last week, a Reuters survey showed, for their second
gain in three weeks, as imports rose with operations at the
Houston Ship Channel returning to normal.
U.S. inventories of distillate fuel. including heating oil
and diesel, probably fell by 1 million barrels last week,
according to a Reuters poll ahead of industry group the
American Petroleum Institute's (API) weekly supply statistics
on Tuesday at 2030 GMT, to be followed by government statistics
from the Energy Information Administration (EIA) on Wednesday.
[]
Analysts attributed the decline, which would be the fourth
in as many weeks, to lower production with refineries in
seasonal maintenance, and a potential increase in demand as
distributors probably restocked.
Gasoline inventories may have also dropped in the week to
Oct. 15 to post their fourth consecutive weekly drop, down by
1.1 million barrels according to the poll, partly as imports
from Europe slow because of walkouts at French refineries.
France began to tap emergency fuel reserves at the start of
a second week of action by refinery and port strikers as a
growing number of petrol stations began to run dry on Monday.
[]
Nationwide strikes over pension reforms have spread to the
country's 12 oil refineries over the past seven days, adding to
the impact of a three-week-long strike at France's largest oil
port, Fos-Lavera, over working conditions and a port reform.
U.S. gasoline <RBc1> and heating oil futures <HOc1>, the
distillate benchmark, also rose 2 percent on Monday as the
French strikes continued to hit fuel production.
Japan's Nikkei posted modest gains on Tuesday, with banking
shares higher after Citigroup reported stronger-than-expected
profits, but the yen's continued strength weighed on the
market. []
(Editing by Clarence Fernandez)
