* U.S. crude down $1 on demand destruction concerns
* Dollar surges on euro zone debt woes
* Coming Up: Weekly U.S. unemployment claims, 1230 GMT
(Updates prices, analyst comments)
By Nia Williams
LONDON, April 14 (Reuters) - Oil fell more than $1 on
Thursday on concerns of high prices sparking demand destruction
and a stronger dollar, outweighing the impact of a drop in U.S.
gasoline stocks and continuing conflict in Libya.
On the day commodities giant Glencore <GLEN.UL> unveiled
plans for what could be London's biggest ever IPO, U.S. crude
fell 52 cents to $106.59 a barrel by 1155 GMT after earlier
dropping more $1 to as low as $106.07.
Brent crude for May <LCOc1> was down 56 cents to $122.32
after briefly dipping 95 cents to an intra-day low below $122.
"I believe we are in a price zone where we get an impact on
demand. Sustaining current prices is going to be difficult,"
Petromatrix analyst Olivier Jakob said. "Admittedly we still
have some geo-political risks but some small exports are coming
back out of Libya."
Libyan rebels are exporting a "minimum amount" of crude
from fields pumping around 100,000 barrels per day, far less
than usual production of 1.6 million bpd.
Analysts said supply is unlikely to rise significantly
unless a resolution to the conflict is reached. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
More on Middle East unrest: [] []
Libya Graphics http://link.reuters.com/neg68r
Glencore IPO in graphics http://r.reuters.com/duj98r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The debate over whether high prices are crimping oil demand
has split market watchers, with some arguing it is premature to
suggest signs of destruction are visible and the threshold for
price driven demand reaction is higher than in 2008.
This week the International Energy Agency and Organisation
of the Petroleum Exporting Countries both warned high prices
could dent demand but did not change their global demand
forecasts. []
Prices found some support from U.S. gasoline stocks which
plunged by 7 million barrels last week to their lowest level
since October as refiners cut processing rates and cleared
inventories of winter-grade fuel. []
The significantly higher-than-expected fall was bullish for
crude in early trade but in a Commerzbank note analysts warned
the positive sentiment on U.S. gasoline demand caused by the
plunge in inventories might be short-lived.
"This is illustrated by the latest MasterCard SpendingPulse
survey, which shows gasoline demand in the US dropping the week
ended April 8 by 1.9 percent y-o-y (4-week average), presumably
in line with skyrocketing retail prices," Commerzbank said.
DOLLAR SURGE, CHINESE INFLATION CONCERNS
The dollar surged against the euro, pushing the dollar index
<.DXY> higher on market speculation that euro zone countries
including Greece and Ireland may be forced to restructure their
massive debts. []
A strong dollar tends to pressure dollar-denominated
commodities including crude because it raises the value of
greenbacks paid to producers while making it more expensive for
consumers using other currencies.
In China, the world's second-largest oil consumer after the
United States, annual inflation was reported to have accelerated
faster than expected in March. []
The official first quarter GDP figures and March consumer
price data will be released on Friday and closely scrutinised
for signs growth is out of control, which could prompt further
monetary tightening measures from the government.
"It (fiscal tightening) might be a bad thing for oil in the
short-term but in the long-term if it means a soft landing for
the Chinese economy it is a very good thing," said Christopher
Bellew, an oil trader at Bache Commodities. "We don't want the
over-heating to continue."
The market will also be keeping an eye on U.S. weekly
unemployment claims, scheduled for release at 1230 GMT.
(Additonal reporting by Florence Tan;
