* U.S. stocks turn negative, weigh on oil
* Dollar bounces up after early weakness, weighs on oil
* Tropical storm forms, not expected to hit Gulf of Mexico
* Coming up: API oil inventory data, Tues, 4:30 p.m. EDT
(Recasts, updates prices, market activity, changes byline and
moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Aug 23 (Reuters) - Oil futures prices fell to a
six-week low on Monday, turning negative as Wall Street slipped
after a higher open and weighed down by the dollar's strength
after the currency also bounced.
Lingering concerns about the economy, bulging U.S.
stockpiles and spare capacity from producers kept pressuring
the market after prices declined last week.
U.S. crude for October delivery <CLc1> fell 82 cents, or
1.11 percent to $73 a barrel by 12:19 p.m. EDT (1619 GMT),
having traded from $72.80 to $74.48. That intraday low was the
lowest since prices fell to $71.44 on July 7.
October Brent crude <LCOc1> fell 77 cents to $73.49.
"Oil was trying to get traction early with the (higher)
stock market this morning. But the time of year and the
oversupply are weighing on the market," said Phil Flynn,
analyst at PFGBest Research in Chicago.
The U.S. summer driving demand season is nearing its end
and the calendar is moving into the "shoulder" season between
summer driving demand and the winter heating season.
U.S. stocks fell after a higher open, pulled lower by
technology shares and Hewlett-Packard Co's <HPQ.N> weakness
after it launched a bid for 3PAR Inc <PAR.N>. Lingering
concerns about economic growth also weighed on stocks. []
The euro <EUR=> extended declines versus the U.S. dollar,
falling through support at the euro's 55-day simple moving
average level. The dollar index strengthened <.DXY> after being
weaker earlier.
A stronger dollar can pressure oil prices as money shifts
out of more risky commodities and also because countries with
other currencies must pay more for dollar-denominated oil.
Oil prices were pushed lower by last week's economic
reports that included data showing U.S. jobless claims hit a
nine-month high and U.S regional manufacturing contracted for
the first time in a year, reviving double-dip recession fears.
Oil this year has traded in a $64.24-$87.15 range as the
economy's recovery has not lifted demand sufficiently to lower
ample stockpiles. U.S. combined petroleum stocks in the week to
Aug. 13 climbed to their highest level since the government
began keeping weekly records in 1990. []
Speculative interest in oil slipped last week. Money
managers cut net long crude oil positions on the New York
Mercantile Exchange, the Commodity Futures Trading Commission
said on Friday. []
Oil prices had received some support early from the
formation of Tropical Storm Danielle, which was expected to
strengthen into a hurricane in the next 24 hours as it moved
west-northwest toward Bermuda, the U.S. National Hurricane
Center said. []
But computer models expected the storm's trajectory to take
it north, missing the Gulf of Mexico energy infrastructure.
Though the Atlantic hurricane season was expected to be very
active, so far the season has produced few disruptions to
energy operations in the Gulf of Mexico region.
"The upcoming storm in the Atlantic is expected to deviate
north and will again be a storm that will not have any impact
on oil assets in the U.S. Gulf," said Olivier Jakob, analyst at
Petromatrix, in a report.
(Additional reporting by Alex Lawler in London and Alejandro
Barbajosa in Singapore; Editing by David Gregorio)
