* API industry data show surprise jump in U.S. crude stocks
* Front-month U.S. crude closes below 200-day moving average
* For a technical view, click: []
* Coming Up: EIA U.S. inventory report; 1430 GMT
(Updates throughout, previous SINGAPORE)
By Christopher Johnson
LONDON, July 28 (Reuters) - Oil slipped towards $77 per
barrel on Wednesday after an unexpected increase in U.S. crude
stockpiles and a drop in U.S. consumer confidence fuelled doubts
about the pace of recovery in energy demand.
U.S. crude for September <CLc1> fell 35 cents at $77.15 by
0819 GMT, after reaching an early intra-day low of $76.88 a
barrel. ICE Brent lost 28 cents to $75.85.
Prices touched $79.69 per barrel on Tuesday, their highest
in almost 12 weeks, boosted by Wall Street gains and strong
earnings by companies including DuPont and Co <DD.N>.
But U.S. crude futures, also known as WTI, fell sharply
after a report showed U.S. consumers in July were the least
confident about the economy since February because of worries of
a stagnant job market. []
The American Petroleum Institute said U.S. crude inventories
also posted a surprise increase of 3.1 million barrels last
week, compared to a forecast decline of 1.6 million barrels.
Those figures pushed U.S. crude down to $77.50 by Tuesday's
close, significantly well below the front-month contract's
200-day moving average.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing U.S. light crude oil futures front
month versus its 200-day moving average, click:
http://link.reuters.com/xav89m
For a graphic of the correlation between U.S. crude and the
S&P 500 Index, click: http://link.reuters.com/baw89m
For a graphic on the technical outlook for U.S. crude,
click: http://graphics.thomsonreuters.com/WT/20102807085210.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
RESISTANCE
"With trading volume at the lows of the year, continued
stock builds, weakening product cracks, we will remain very
cautious on any attempt to move above $80 per barrel on the wake
of the S&P," Olivier Jakob, consultant at Petromatrix, said.
"WTI moved back below the 200-day moving average and both
WTI and the S&P still need to prove that they can sustain that
line as a support rather than a resistance."
Figures from the U.S. Department of Energy on stocks and
demand will be released at 1430 GMT on Wednesday. []
Those statistics are forecast to show U.S. crude oil stocks
fell last week on a slip in imports and possibly some reduced
production because of a storm threat in the Gulf of Mexico, a
Reuters poll of analysts showed. []
Refined products stockpiles were forecast to continue to
show increases. For distillates, which include heating oil and
diesel, the forecast was for a gain of 1.8 million barrels, the
ninth consecutive weekly gain, while for gasoline, stocks should
be up 400,000 barrels, the fifth straight increase in the middle
of the U.S. summer driving demand season.
"Price-wise, given that most complexes are still on the top
end of the trading range, we expect to see further erosion from
here, especially if Wednesday's EIA numbers confirm the API
trends," said Edward Meir, senior commodity analyst at brokers
MF Global.
"However, we do not expect a sharp decline given that the
energy complex is within a critical time window weather-wise,
and prices therefore have the potential to turn on a dime."
The Organization of the Petroleum Exporting Countries (OPEC)
has for the past year and a half expressed a preference for
prices to remain stable around $75, saying that encourages
investment to sustain and increase production capacity and does
not threaten the economic recovery.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by William Hardy)
