* Equities slip and U.S. retail sales growth slows
* U.S. crude stocks expected to be higher
* Coming up: API oil data at 4:30 p.m. EST Tuesday
(Updates with Brent settlement)
By Robert Gibbons
NEW YORK, Feb 15 (Reuters) - Brent oil fell more than 1
percent on Tuesday in volatile trading as disappointing U.S.
retail sales growth and China's battle against rising inflation
boosted worries about demand from the world's two largest
energy consumers.
U.S. crude prices pulled back ahead of weekly oil inventory
data expected to show U.S. crude oil stocks rose last week.
While protests in Iran and other Middle East countries
remained a concern, analysts looked for some unwinding of the
geopolitical fear premium put in during Egypt's protests.
Brent's more pronounced retreat had some traders and
analysts expecting the wide gap between the two benchmarks to
come under pressure.
Brent crude <LCOc1> for April delivery fell $1.44 to settle
at $101.64 a barrel. Prices hit a 28-month peak at $104.30 on
Monday.
U.S. crude <CLc1> for March delivery fell 49 cents to
settle at $84.32 a barrel.
Brent's premium to U.S. crude <CL-LCO1=R> seesawed between
$13.24 and $14.90 on Tuesday. Brent's premium to U.S. crude
surged to a record above $16 a barrel on Friday, still
measuring the two March contracts before the March Brent's
expiration.
"That Brent/WTI spread may be getting a little heavy," said
Richard Ilczyszyn, senior market strategist at Lind-Waldock in
Chicago.
U.S. crude has been dogged by high crude oil stockpiles at
the landlocked Cushing, Oklahoma, contract delivery point for
the benchmark West Texas Intermediate.
Analysts surveyed by Reuters on Tuesday expect U.S. crude
inventories rose 2.2 million barrels last week, which could
push stocks Cushing even higher. []
Distillate stocks were forecast down 800,000 barrels while
gasoline stocks were expected to be up 1.7 million barrels.
Traders get an inventory snapshot from the industry group
the American Petroleum Institute at 4:30 p.m. EST (2130 GMT).
"There may be some unwinding of the fear premium on overall
risk reduction as the Middle East hasn't gotten out of control
yet and traders also are getting ready for another expected
rise in U.S. oil supplies," said Phil Flynn, analyst at PFGBest
Research in Chicago.
CHINESE INFLATION
China's consumer price inflation came in lower than
expected for January at 4.9 percent. []
But core inflation, stripped of volatile food prices,
jumped to 2.6 percent year on year, the highest since at least
2002 and up from 2.1 percent a month earlier.
Concern that China may continue monetary tightening and
curb demand growth pulled copper prices off record highs.
[]
MIXED U.S. ECONOMIC DATA
U.S. stocks slid as energy shares pulled back, and after
initially slipping on the smaller-than-expected rise in retail
sales that fueled doubts about consumer spending. []
U.S. retail sales growth slowed in January, but at least
some oil traders and analysts saw the data as supportive or
neutral considering the extreme weather that curbed shopping
traffic.
U.S retail gasoline demand fell for a second consecutive
week, affected by rising retail prices, a report from
MasterCard showed. Demand was up and gasoline prices were up
19.5 percent from the year-ago period. []
Early on Tuesday, some brokers and analysts pointed to
supportive data such as the New York Federal Reserve's gauge of
manufacturing in New York State which climbed in February to
its best mark since June. []
(Additional reporting by Claire Milhench in London, Jennifer
Tan in Singapore and Gene Ramos in New York; Editing by Lisa
Shumaker)
