* Atlantic weather system may turn into cyclone -NHC
* China regulator warns on "slow" global economic recovery
* Coming Up: U.S. API oil inventory report; 2030 GMT
* For a technical view, click: []
(Adds hurricane outlook, China growth warning, updates prices)
By Alejandro Barbajosa
SINGAPORE, June 15 (Reuters) - Oil held steady above $75 on
Tuesday as prospects for rising demand in emerging economies
offset concern about the impact of Europe's debt crisis.
Spain admitted on Monday that the European financial crisis
is taking a toll on the country's banks, while credit ratings
agency Moody's slashed Greek sovereign debt by four notches to
junk status. []
"Certainly Greece is a worry, and I worry about contagion
that could cause a double-dip recession, but there are certain
economies that are doing very well - Asia is booming," said
Peter McGuire, managing director of Commodity Warrants
Australia in Sydney, adding oil could rebound to about $78 by
the end of June.
U.S. crude prices on Monday pared gains following news of
Greece's downgrade but still held onto a 1.8 percent increase
by the settlement. On Tuesday the July contract <CLc1> was
unchanged at $75.12 a barrel at 0505 GMT, still down 14 percent
from a 19-month peak above $87 in early May.
ICE Brent for July <LCOc1>, which expires by the close of
trade on Tuesday, gained 12 cents to $75.32.
Greece's downgrade on Monday interrupted a global rally in
stocks triggered by data showing euro-zone industrial output
surged in April.
The global economic recovery is likely to be "slow and
tortuous" and China faces risks from a multitude of factors
including trade protectionism and bad real estate loans,
China's Banking Regulatory Commission (CBRC) said on Tuesday.
[]
Asian stocks slipped on Tuesday, snapping a five-day
winning streak, while the dollar gained 0.25 percent against a
basket of currencies. [] <.DXY>
"I wouldn't be surprised if the dollar has a correction
against the euro" in the coming months, McGuire said.
A weaker U.S. currency would render oil imports cheaper for
Asian economies.
Emerging markets account for much of the 1.7
million-barrel-a-day growth in oil demand forecast by the
International Energy Agency (IEA) for this year.
Demand from China, the world's second largest energy
consumer, grew by 12.7 percent in April year-on-year, the IEA
said last week, and it is expected to remain robust.
HURRICANE WATCH
Traders were also closely watching a weather system
currently in the middle of the Atlantic Ocean, which the U.S.
National Hurricane Center said has a 40 percent chance of
becoming a tropical cyclone in the next 48 hours.
The Atlantic hurricane season started at the beginning of
this month and lasts through November. Forecasters have said
the 2010 season will be more active than usual. []
A storm heading to the oil-producing Gulf of Mexico, where
BP is struggling to contain the largest oil spill in U.S.
history, could be a catalyst to propel oil prices above $76.30,
the four-week high reached on June 10 that chart watchers
identify as resistance, McGuire said.
Attention in the oil market was set to turn to weekly
inventory reports from top consumer the United States.
Crude oil inventories there probably dropped for the third
straight time last week due to lower imports, a preliminary
Reuters poll of analysts showed on Monday ahead of weekly
industry and government reports later this week. []
[]
On average, crude inventories were forecast to have fallen
1.4 million barrels in the week to June 11, the poll of eight
analysts showed.
Stockpiles of distillate fuel including heating oil and
diesel probably gained 800,000 barrels, while gasoline
inventories were expected to have increased by 500,000 barrels.
Industry group American Petroleum Institute will release
weekly inventory statistics on Tuesday at 2030 GMT, followed by
government data from the Energy Information Administration on
Wednesday at 1430 GMT.
(Editing by Ed Lane)
