* U.S. crude prices set to end Aug with monthly decline
* U.S. crude inventories expected to have risen last week
* Coming up: API oil inventory data, Tues 4:30 p.m. EDT
(Recasts, updates prices, market activity, new byline,
changes dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Aug 31 (Reuters) - U.S. crude prices fell on
Tuesday as concerns about stalled economic growth and high U.S.
inventories kept oil on track for its first monthly decline
since May.
U.S. crude for October delivery <CLc1> fell $1.95, or 2.61
percent to $72.75 a barrel by 12:30 p.m. EDT (1630 GMT), having
traded from $72.61 to $74.73. ICE Brent for October <LCOc1>
dropped $1.64 to $74.96 a barrel.
The market was awaiting U.S. inventory data from the
American Petroleum Institute at 4:30 p.m. EDT (2030 GMT), with
analysts in a preliminary Reuters poll forecasting a
1.3-million-barrel gain in crude stocks in the week to Aug. 27.
[]
Adding to the bearish sentiment was a report from the
Institute for Supply Management-Chicago that showed business
activity in the U.S. Midwest slowed in August. []
But oil regained some ground after data showed U.S.
single-family home prices rose more than expected in June
[] and again when the Conference Board said U.S.
consumer confidence rose in August. []
"Crude got some bounce from the consumer confidence and
home price numbers that lifted the stock market, but the (oil)
market is cautious ahead of the big jobs number on Friday,"
said Richard Ilczyszyn, senior market strategist at
Lind-Waldock in Chicago.
Wall Street erased initial losses and moved higher after
the consumer confidence and home price reports helped soothe
some investor anxiety about the strength of the economy. []
Still on tap for Tuesday release are the Federal Open
Market Committee's minutes from its Aug. 10 meeting.
[] On Friday, markets will react to the key August
U.S. nonfarm payrolls report.
Data from Japan was mixed, with total oil product sales up
more than expected in July, but August manufacturing activity
expanding at the slowest pace in more than a year.
[] []
Crude failed to get a boost from further weakness in the
dollar. The yen came within reach of a 15-year high against the
U.S. currency, which slipped against the euro <EUR=>. The
dollar index <.DXY> also weakened.
A weak dollar can boost oil prices because it makes
dollar-denominated oil cheaper for buyers using other
currencies.
OIL'S AUGUST SLUMP
Crude in New York is on track to finish the month down
about 6 percent, after rising in July and June.
Prices in May, their most recent month of decline, hit a
2010 low of $64.24 on the 20th day of that month, the weakest
front-month price since July 30, 2009, after reaching the 2010
peak of $87.15 on May 3.
Brent has been at an atypical premium to U.S. crude, the
result of North Sea supply disruptions and high U.S.
stockpiles, especially at the Cushing, Oklahoma, delivery hub
for U.S. benchmark West Texas Intermediate.
STORM WATCH
Traders remain wary of supply disruptions that can occur
during the Atlantic hurricane season.
Authorities were worried that powerful Hurricane Earl could
brush up against the U.S. East Coast, and in addition to Earl,
the U.S. National Hurricane Center was monitoring two other
tropical systems in the Atlantic basin.
So far, computer models showed no immediate threat to
energy infrastructure in the Gulf of Mexico region.
[]
(Additional reporting by Gene Ramos in New York, Alex Lawler
in London, Florence Tan; Editing by Dale Hudson)
