* Quarter of U.S. Gulf output shut due to Alex -govt
* Coming Up: EIA U.S. inventory report; 1430 GMT
* For a technical view, click: []
By Alejandro Barbajosa
SINGAPORE, June 30 (Reuters) - Oil edged lower on
Wednesday, heading for its first quarterly drop since 2008 as
risk aversion over Europe's debt crisis neutralised the effect
of rising demand in the United States and China, the world's
top two consumers.
The dollar's rally continued on Wednesday, further eroding
oil purchasing power for emerging economies, while Japan's
Nikkei slumped more than 2 percent to a seven-month low,
tracking Tuesday's sell-off in Wall Street. []
[]
Crude pared losses after the United States late on Tuesday
said Hurricane Alex had forced the shutdown of a quarter of
U.S. oil production in the Gulf of Mexico and after an industry
report showed the nation's inventories fell more than expected
last week. [] []
U.S. crude for August <CLc1> tumbled as much as 61 cents to
$75.33 a barrel and was down 23 cents at $75.71 by 0257 GMT.
ICE Brent crude <LCOc1> slid 38 cents to $75.06.
Prices have declined almost 10 percent from the end of
March, the first quarterly drop since the October-December
period in 2008. Still, in early May U.S. crude hit a 19-month
high above $87.
"I am very bearish on Europe," said Clarence Chu, an energy
trader at Hudson Capital Energy in Singapore.
"The market just wants to get higher and then there is bad
news and it comes down again. The premium for Alex has
evaporated, so I wouldn't be surprised if prices come back
down. It could get really close to the $75 support level."
Banks must repay 442 billion euros ($545.5 billion) to the
European Central Bank on Thursday, leaving a potential
liquidity shortfall in the financial system of over 100 billion
euros. []
The yen and the Swiss franc held on to broad gains on
Wednesday as nervous investors rushed to unwind leveraged carry
trades on the back of a significant deterioration in risk
appetite, while the dollar was up versus a basket of
currencies. []
Investors fled the U.S. stock market on Tuesday and the S&P
500 tumbled to its lowest level in eight months in a sell-off
triggered by a wave of rising alarm over the global economic
outlook.
ALEX AND INVENTORIES
Tropical Storm Alex was upgraded to a hurricane in the Gulf
of Mexico late on Tuesday but was moving north of Mexican oil
rigs and far southwest of U.S. fields, easing concerns about a
supply disruption. []
Precautionary evacuations and closures interrupted 395,878
barrels per day (bpd), or 24.7 percent of U.S. oil output in
the Gulf of Mexico, the U.S. Bureau of Ocean Energy Management,
Regulation and Enforcement said late on Tuesday. []
"They will only shut down for a few days, but obviously
there will be an impact on next week's inventory figures," Chu
said.
"It's the hurricane season, but I don't think there is any
potential threat just yet. Damage to oil rigs could change
fundamentals dramatically."
U.S. crude inventories fell 3.4 million barrels in the week
to June 25, industry group the American Petroleum Institute
said on Tuesday, outstripping analyst expectations of a
900,000-barrel draw in the latest Reuters poll. []
Gasoline stocks fell 908,000 barrels, versus analysts'
expectations of a 500,000-barrel draw, but distillates,
including heating oil and diesel, rose 4 million barrels, above
forecasts for a 800,000-barrel gain.
The U.S. Energy Information Administration will publish
more closely-watched government statistics on inventories on
Wednesday at 1430 GMT.
The United States will accept offers from a dozen countries
and international agencies to help contain and clean up the BP
Plc <BP.L> <BP.N> oil spill in the Gulf of Mexico, the State
Department said on Tuesday. []
(Editing by Clarence Fernandez)
