* Silver turns lower, helps spark profit taking in oil
* U.S. oil turns lower after hits highest since Sept. 2008
* Coming up: API oil data at 4:30 p.m. EDT Tuesday
(Recasts, updates prices and market activity, changes byline and moves
dateline from previous LONDON)
By Robert Gibbons
NEW YORK, April 25 (Reuters) - Oil turned lower on Monday as a bout of
profit-taking was sparked when silver reversed after a sharp rally and when
there was no follow through after U.S. oil prices hit their highest since
September 2008 in early trading.
"Silver's sell off spilled over to crude markets and traders took
profits," said Dan Flynn, analyst at PFGBest Research in Chicago.
Continued unrest in the Middle East and OPEC member Nigeria
highlighting potential threats to supply had helped boost oil early, along
with concerns about inflation after the dollar index fell to its lowest
since 2008 on Thursday.
The dollar index <.DXY> measuring the greenback against a basket of
currencies also bounced and pushed positive after silver turned back.
Brent crude for June <LCOc1> fell $1.22 to $122.77 a barrel by 10:54
a.m. (1454 GMT), having reached $124.75 earlier.
U.S. crude <CLc1> for May fell $1.07 to $111.22, retreating from an
earlier $113.48 peak, highest intraday price since September 2008.
Spot silver <XAG=> turned lower on Monday, wiping out sharp initial
gains after a failure to rise above 1980 highs triggered heavy technical
selling. []
Investors returning from a long holiday weekend were also expected to
show caution ahead of a U.S. Federal Reserve two-day policy meeting this
week.
The Fed meeting will include a news conference on Wednesday, as
investors look for clues about the direction of monetary policy as the
Fed's bond buying program nears its end in June.
Even as supply threats from geopolitical flare ups in the Middle East
and Nigeria lent prices support, concerns have increased about oil demand
being eroded by high prices.
SUPPLY THREATS REMAIN
NATO forces flattened a building in Muammar Gaddafi's compound, while
forces loyal to the Libyan leader have bombarded the western rebel
stronghold of Misrata. [] []
Troops and tanks stormed Deraa, Syria, residents said, seeking to crush
resistance in the city where a month-long uprising first erupted against
the rule of President Bashar al-Assad. []
Yemeni security forces opened fire to block a thousands-strong protest
amid uncertainty over a Gulf plan for President Ali Abdullah Saleh to step
down within weeks. []
In top African oil producer Nigeria more than 500 people were killed in
post-election violence, a human rights group said. []
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For a 24-hour technical outlook on U.S. oil:
http://graphics.thomsonreuters.com/WT1/20112504084605.jpg
For a 24-hour technical outlook on Brent oil:
http://graphics.thomsonreuters.com/WT1/20112504090558.jpg
For stories on Libya & Middle East crisis: []
For a TAKE-A-LOOK on Middle East, N Africa:[]
For an analysis on unrest in Yemen: []
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Despite Libya's civil war and potential threats to supply elsewhere,
Gulf delegates told Reuters that while OPEC members with spare capacity are
ready to pump above agreed limits if there is a need, the producer group is
unlikely to formally change output targets at a meeting in June.
[]
(Additional reporting by Gene Ramos in New York, Barbara Lewis in London
and Florence Tan and Manash Goswami in Singapore;
Editing by John Picinich)
