* U.S. crude, gasoline inventories expected to rise
* Dollar gains against basket of currencies
(Updates throughout, changes dateline from LONDON)
NEW YORK, Dec 8 (Reuters) - Oil prices fell $1 to below $73
a barrel on Tuesday, extending losses to a fifth straight
session, as the stronger dollar and high U.S. inventory levels
weighed on prices.
The dollar gained against a basket of currencies <.DXY>,
making dollar-denominated commodities more expensive for
holders of other units.
U.S. crude for January delivery <CLc1> traded down $1 at
$72.93 a barrel by 12:17 p.m. EST (1717 GMT), after settling
$1.54 lower on Monday. in London, Brent crude <LCOc1> fell 83
cents to $75.60 a barrel.
"The oil complex has come off sharply this morning on a
renewed weakening in the dollar and associated slippage in the
equity markets," Jim Ritterbusch, president of Ritterbusch &
Associates, said in note.
<-------------------------------------------------------------
For a graphic showing the correlation between oil and the
dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
------------------------------------------------------------->
Oil markets have looked to wider economic data and equity
markets this year for a sign of a turnaround in the economy
that could bolster crude demand and drain high inventory levels
in key consumers, such as the United States.
The U.S. Energy Information Administration on Tuesday
revised downward its forecast for 2010 world oil demand by
160,000 barrels per day. []
Crude oil stocks at the giant storage hub in Cushing,
Oklahoma -- the delivery point for the New York Mercantile
Exchange's oil futures contract -- have swelled, deepening the
discount of front-month crude futures to second-month futures.
This market condition, called a contango, encourages more
storage onshore and offshore, and drags down prices further.
"Cushing storage are the leading reason January prices
(are) lower and the continuing expansion of the contango has
traders worries about the likelihood of further increases in
floating storage; most on-land storage is already full," said
Peter Beutel, president of Cameron Hanover in New Canaan,
Connecticut.
Weekly U.S. inventory data from the American Petroleum
Institute, due out at 4:30 p.m. EST Tuesday, was expected to
show a 500,000-barrel build in crude stocks in the week to Dec.
4 and a rise of 1.4 million barrels in gasoline inventories.
[]. Weekly data from the U.S. Energy Information
Administration was due out on Wednesday morning.
Oil prices have rallied to a high for the year of $82 a
barrel, reached in October, from below $33 in December 2008,
even though fundamentals of supply, demand and inventories are
bearish in the view of many analysts.
(Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons
in New York; Alex Lawler in London; Editing by Walter Bagley)
