* Oil eases after record surge
* Market awaiting details on U.S. government's rescue plan
* U.S. oil sector recovering from Hurricane Ike
(Updates prices, adds U.S. inventory forecast, BTC pipeline
details)
By Alex Lawler
LONDON, Sept 23 (Reuters) - Oil dropped more than $2 a
barrel on Tuesday, weighed by doubts about the U.S. bailout plan
and as investors booked profits after an historic one-day rise
in the previous session.
U.S. crude for November <CLc1> fell $2.37 to $107.00 a
barrel by 1121 GMT, after rising nearly $7 on Monday. November
Brent crude <LCOc1> traded down $2.61 to $103.43.
The October U.S. crude contract on Monday settled up 15.7
percent at $120.92 -- the biggest one-day gain on record --
before expiring, supported by the weak dollar and on hopes the
$700 billion U.S. bailout plan would ease the U.S. financial
crisis and support demand in the world's top consumer.
Concerns an agreement among U.S. lawmakers on the deal
could stretch into next week weighed on markets on Tuesday,
however. []
"It started off with a wave of optimism and now perhaps a
bit of realism has kicked in," said Christopher Bellew, a broker
at Bache Commodities.
"The dollar's weak, but the stock market is weak as well.
The implications of that for demand are probably why we're
coming back down again."
The weak dollar can boost the appeal of commodities to
investors seeking to hedge against inflation and the weak
greenback. The dollar rose on Tuesday against a basket of other
major currencies.
The U.S. regulator of futures markets, the Commodity Futures
Trading Commission, said on Monday it was reviewing the oil
price jump to ensure that the trading was valid.[]
WEAK DEMAND
After hitting a record high of $147.27 a barrel in July, oil
dropped to $91 a barrel last week on mounting evidence that high
energy costs and slowing economic growth were undercutting fuel
demand in large consuming nations.
U.S. oil consumption is running about 4 percent below last
year, according to the latest government data.
Prices have rebounded after Hurricane Ike battered U.S. oil
infrastructure earlier this month, and over 75 percent of
production in the Gulf of Mexico -- home to a quarter of U.S.
output -- remains closed. []
A Reuters poll of analysts ahead of weekly U.S. government
inventory data due out on Wednesday forecast that crude stocks
fell by 1.3 million barrels last week due to disruptions caused
by Ike. []
Distillate stocks were forecast to have fallen by 1.4
million barrels, with gasoline stocks expected to have dropped
by 4 million barrels after Ike shut Gulf Coast refineries.
News that Saudi Arabia had cut supplies to oil companies,
reported by Reuters on Monday, as well as unrest in Nigeria and
higher-than-expected Chinese imports have also supported prices.
The BP Plc-led <BP.L> Baku-Tbilisi-Ceyhan (BTC) oil pipeline
has shut down for a short period of planned maintenance, BP
said, but exports will not be affected. []
(Reporting by Fayen Wong in Perth and Alex Lawler and Matthew
Robinson in London, editing by Anthony Barker)
