* Equities rally, then pare gains, pull oil prices back
* Weaker U.S. dollar helped boost oil early
* Coming up: API oil data 4:30 p.m. EDT Wednesday
(Recasts, updates prices, market activity, changes byline,
moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, July 6 (Reuters) - U.S. oil prices slipped on
Tuesday, giving up earlier gains as it seesawed with equities
as both markets sought to break a string of declining
sessions.
"The S&P 500 fell back from its highs and that caused crude
to pull back and sell stops were triggered below $73 a barrel,"
said Robert Yawger, senior vice president, energy futures at MF
Global in New York
U.S. crude for August delivery <CLc1> fell 30 cents, or
0.42 percent, to $71.84 a barrel by 1:22 p.m EDT (1722 GMT),
retreating from a $73.86 intraday peak and having earlier
fallen as low as $71.09, its lowest level in over a month.
ICE Brent crude for August <LCOc1> fell 7 cents to $71.40,
slipping from its peak of $73.28.
The earlier U.S. oil price jump above $73 a barrel was a
bounce after five straight sessions of declines amid rallying
equities and positive macroeconomic data.
Global stocks bounced from six- and seven-week lows.
[] MSCI's all-country world stock index
<.MIWD00000PUS> rose more than 1 percent.
U.S. markets reopened on Tuesday after an Independence Day
holiday and stocks rose broadly following five days of losses.
[] Stocks were lifted by a report showing the services sector
grew a sixth straight month in June and on signs of strength in
Europe's banking system supported U.S. equities.
The U.S. non-manufacturing sector grew in June. But the
rate of growth slowed more than expected and hit its lowest
since February, according to the report from the Institute for
Supply Management. []
The dollar weakened broadly <.DXY> on Tuesday and extended
losses after the report showed service sector growth, but
slower growth than expected. []
The weak dollar usually supports oil prices because it
makes it less expensive for buyers of dollar-denominated oil
using other currencies. A weaker dollar also lowers the value
of currency oil producers receive for the commodity.
TRYING TO REBOUND FROM SWOON
Oil prices were attempting to rebound on Tuesday after weak
U.S. employment numbers and disappointing manufacturing data
from both the United States and China helped oil prices on
Friday to finish down 8.5 percent from the previous week.
The disappointing data fanned fears of stagnate world
economic recovery and curbed investors' risk appetite for oil.
"While we've seen prices bounce from the recent lows, the
move back up is still treacherous as there is still no clear
sign yet that the bottom in the current market has been
reached," said Phil Flynn, analyst at PFGBest Research in
Chicago.
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Poll: Outlook for global supply and demand []
Reuters Insider: http://link.reuters.com/vud95m
Graphic: performance across commodity markets
http://link.reuters.com/hun72k
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After Hurricane Alex swept into Mexico last week, oil
traders on Tuesday eyed a low pressure system that the U.S.
National Hurricane Center said had a 30 percent chance of
developing into a tropical depression as it moves northwest
toward Mexico's Yucatan peninsula. []
The weekly oil inventory report from the American Petroleum
Institute will be delayed to Wednesday due to Monday's U.S.
holiday and government statistics from the Energy Information
Administration will be published on Thursday.
(Additional reporting by Emma Farge in London and Alejandro
Barbajosa in Singapore; Editing by Marguerita Choy)
