* U.S. crude inventories likely up, distillates down -poll
* Wave cycle shows oil retracing to below $80
[]
* Coming Up: U.S. API weekly oil stocks; 2030 GMT
By Alejandro Barbajosa
SINGAPORE, Oct 5 (Reuters) - Oil slipped on Tuesday on
forecasts for gains in U.S. crude and gasoline inventories, a
stronger dollar, falling equity markets and technical signals
showing Monday's rally to a two-month high was overdone.
U.S. crude for November <CLc1> shed 12 cents to $81.35 a
barrel at 0259 GMT, more than $1 below a two-month high of
$82.38 touched on Monday. ICE Brent for November <LCOc1>
slipped 25 cents to $83.03.
"Investors have recently become more optimistic, but the
oil market is nearly at overbought levels," said Serene Lim, a
Singapore-based oil analyst at ANZ, referring to the relative
strength index reaching levels close to 70 in the past few
days, a technical signal that prices may be due for a
correction.
For a graphic of the RSI for U.S. crude:
http://graphics.thomsonreuters.com/AS/0810/ABE_20100510103324.jp
g "It could be more cautious ahead," Lim said. "For the
release of API numbers today, the market is expecting (crude)
inventories to rise because of a rebound in imports and
refinery demand slowing down because of the maintenance season
in the U.S."
U.S. crude oil inventories probably rose last week by
600,000 barrels, while gasoline stocks were expected to have
gained 100,000 barrels as refinery utilisation dropped, a
Reuters poll ahead of weekly inventory reports showed on
Monday. []
Industry group the American Petroleum Institute (API) will
issue its weekly inventory report on Tuesday at 2030 GMT. The
U.S. Energy Information Administration (EIA) will follow with
government data on Wednesday.
But supplies of distillates including heating oil and
diesel were projected to have declined by 800,000 barrels as
demand remained strong, particularly for diesel, a major
component of this inventory segment, according to the poll.
"As we go into the heating oil season, there could be
potential to drive the market even higher," Lim said.
"Any surprise of better-than-expected U.S. economic data
coming out, including today's ISM non-manufacturing PMI and
Friday's non-farm payrolls will move the market even higher."
Friday sees the release of key monthly U.S. employment
data. []
U.S. economic indicators have so far this week been mixed.
Pending sales of previously owned U.S. homes rose more than
expected in August to a four-month high, but new U.S. factory
orders fell slightly more than expected. []
A crippling strike at France's top oil port, the world's
third-largest, will continue on Tuesday and some refineries are
expected to run out of crude supplies in about a week, unions
and industry officials said. []
The upper Houston Ship Channel should reopen by Tuesday
night, restoring crude flows to four refiners in Texas holding
4.9 percent of U.S. capacity before their supplies run low, the
U.S. Coast Guard said on Monday. []
Asian equities had a weak start on Tuesday, while global
equity markets fell a day earlier on lingering concerns about
the global economy and the burden of debt in some euro zone
countries. [], []
The euro on Monday fell from its highest level versus the
dollar in more than six months amid renewed concerns about the
financial viability of euro zone banks, prompting investors to
cut overly bullish bets on the euro. The greenback continued to
strengthen on Tuesday, up 0.2 percent against a basket of
currencies. [] <.DXY>
Iraq raised its proven oil reserves figure by a quarter on
Monday in a bid to match the clout of leading producer Saudi
Arabia and strengthen its case for OPEC to grant it a higher
output quota. []
(Editing by Ed Lane)
