* Share prices mixed after stress tests
* Taiwan Formosa refinery shut after fire - spokesman
* Tropical Storm Bonnie fades in Gulf of Mexico
(Recasts, updates prices)
By David Turner
London, July 26 (Reuters) - Oil fell moderately on Monday as
Tropical Storm Bonnie faded over the Gulf of Mexico, but trading
was cautious ahead of U.S. economic and corporate earnings data.
Oil traders were reluctant to push oil prices too far in
either direction during morning European trading, since many are
concentrating on the prospects of the United States, the main
source in recent weeks of disappointing economic data that has
kept alive fears of an erratic global recovery.
Commenting on the oil market, Eugen Weinberg, head of
commodities research at Commerzbank in Frankfurt, said: "Most of
the action and the fate of today's prices will be decided in the
U.S. not in Europe."
He added that in the coming days: "if the US data is
surprisingly weak, then people might get worried about a double
dip (a second leg of recession)."
Later on Monday the United States releases new homes data,
and U.S. firms such as Lorillard, the cigarette maker, publish
second-quarter earnings. Over the past two weeks, many corporate
earnings results have been stronger than expected, but much of
the country's economic data has been weaker.
U.S. crude for September delivery <CLc1> fell 45 cents to
$78.53 by 0850 GMT. ICE Brent crude <LCOc1> declined 34 cents to
$77.11.
European equities <> failed to provide support to oil
prices, falling slightly because of growing scepticism that
stress tests on European banks, published on Friday, were not
strict enough. []
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Seven of 91 banks failed the tests, with an overall capital
shortfall of $3.5 billion euros. [] []
Tropical Depression Bonnie faded overnight and is no longer
shown by the National Hurricane Center's outlook, although the
threat of the storm did take a bite out of production in the
Gulf of Mexico oil area. []
However, forecasters have said the 2010 Atlantic hurricane
season, which runs from June 1 to Nov. 30, could be the worst
since 2005, when Hurricanes Katrina, Rita, and Wilma caused
havoc in the Gulf Coast, damaging oil rigs and refineries and
forcing sharp cuts in production.
A fire at the weekend forced the closure of Formosa
Petrochemicals Corp's <6505.TW> 540,000 barrels per day refinery
in Taiwan, with a crude distillation unit expected to be shut
long term and other units possibly restarting this week.
[]
In China, Dalian Port Co. <2880.HK> has resumed operations
at two of its oil berths and its main 300,000 tonnage berth is
expected to reopen soon, the company said on Sunday, after a
fire at the port a week ago shut the berths down.
The U.S. economy is not likely to slip back into recession,
but letting tax cuts for the wealthiest Americans expire is
necessary to show commitment to cutting budget deficits,
Treasury Secretary Timothy Geithner said on Sunday.
[]
In a sign of bullishness on oil prices, open interest
positions increased on September $85 and $90 call options on
Friday compared with a week before, as crude prices rose to near
$80 a barrel before ending the session slightly lower.
[]
Separately, BP Plc decided Chief Executive Tony Hayward
should step down over his handling of the Gulf of Mexico oil
spill and his departure is likely to be announced in the next 36
hours, sources close to the company said. []
(Additional reporting by Fayen Wong in Perth; editing by
Keiron Henderson)
