(Refiles to fix headline)
* U.S. crude falls to $111.15; Brent drops to $122.78
* Saudi Aramco says not comfortable with current oil prices
* Investors reduce risk ahead of Fed meeting -analyst
* Coming up: U.S. consumer confidence for April; 1400 GMT
(Adds inventory data poll, U.S. dollar strength)
By Manash Goswami and Florence Tan
SINGAPORE, April 26 (Reuters) - U.S. crude futures fell more
than $1 on Tuesday as investors reduced risk ahead of a meeting
of the U.S. Federal Reserve and after Saudi Aramco's chief
executive said the kingdom was not comfortable with current oil
prices.
NYMEX crude for June delivery <CLc1> declined as much as
$1.13 a barrel to $111.15, and traded at $111.17 a barrel by
0414 GMT. Brent <LCOc1> dropped 74 cents to $122.92 a barrel.
"We are not comfortable with oil prices where they are
today...I am concerned about the impact it could have on the
global economy," Khalid al-Falih, Aramco's chief executive, told
an industry gathering in Seoul.
Crude snapped three days of gains, sliding along with silver
and gold, as investors were uncertain whether the U.S. Federal
Reserve would signal a change in its easy monetary policy after
a two-day meeting of policymakers wraps up on Wednesday.
"There is some risk reduction because the market wants to
watch if Bernanke will say anything about a change of stance,"
Tetsu Emori, a Tokyo-based commodities fund manager at Astmax
Investments, said. "Any change of stance is highly unlikely."
Participants will look to the post-meeting news conference
by Fed Chairman Ben Bernanke on Wednesday -- the first regularly
scheduled news briefing by a Fed chief in the U.S. central
bank's 97-year history -- to see how the Fed plans to exit from
its ultra-loose policy.
"The market is displaying a cautious stance as any signs of
the Fed tightening dollar supply would reduce crude gains," said
Serene Lim, an analyst at ANZ.
Saudi Arabia has enough spare crude capacity to meet demand
as oil prices extend a gain above $120 per barrel, Falih said,
adding that he didn't see any tightness in global oil supply.
[]
"They should be happy with the increases, but what Saudi
Arabia is looking for is stability in prices," Emori said.
"Anything outside of a range of $90-$110 makes them
uncomfortable."
STOCKPILES, DOLLAR
The slide in NYMEX futures may have been steeper than Brent
partly on expectations U.S. crude oil stockpiles were likely to
have risen last week, with crude imports heftier than demand
from refineries, a preliminary Reuters poll ahead of weekly
inventory reports showed on Monday.
The increase follows an unexpected drawdown the week before
which was the first decline in domestic crude stocks in seven
weeks. The American Petroleum Institute will issue its data
later in the day followed by the Energy Information
Administration on Wednesday.
The strengthening of the U.S. dollar against the euro also
weighed on oil. The euro slipped after European Central Bank
Governor Jean-Claude Trichet said he shares the view that a
strong dollar is in the interest of United States.
Still, U.S. oil futures have a strong support at $110 a
barrel and are unlikely to dip below that level, Emori said.
Prices may start to recover after the Fed meet ends as the
central bank is expected to stick with its current policy, which
will provide "a very good trigger," Emori said.
MIDDLE EAST
Oil has strengthened in the past few months as protests in
Libya spread to other countries in the Middle East and North
Africa such as Syria and Yemen, boosting fears of further supply
disruptions from the region at a time when demand from key
consumers such as China and India continues to rise.
Security forces have arrested about 500 pro-democracy
sympathisers across Syria after the government sent tanks to try
to crush protests in the city of Deraa, the Syrian rights
organisation Sawasiah said on Tuesday.
The independent organisation said it had received reports
that at least 20 people had been killed in Deraa since tanks
moved in on Monday. []
Italy, which has been playing a limited role in NATO
operations in Libya, decided on Monday its air force would be
allowed to bomb selected military targets in the former Italian
colony. []
Refugees fleeing Libya's Western Mountains told of heavy
bombardment by leader Muammar Gaddafi's forces as they try to
dislodge rebels in remote Berber towns. []
(Editing by Clarence Fernandez)
