* U.S. crude, gasoline inventories expected to rise
* Dollar gains against basket of currencies
(Recasts, updates prices at settlement)
By Edward McAllister
NEW YORK, Dec 8 (Reuters) - Oil prices fell more than $1 to
below $73 a barrel on Tuesday, extending losses to a fifth
straight session as the dollar strengthened and demand concerns
weighed on prices.
U.S. crude for January delivery <CLc1> fell $1.31 to settle
at $72.62, down $1.31. Oil has fallen $5.75, or 7.3 percent,
since prices last rose on Dec. 1. In London, Brent crude
<LCOc1> fell $1.24 to settle at $75.19.
The last five days' losses are the biggest since prices
fell 7.9 percent on Sept. 23 and Sept. 24.
The dollar gained against a basket of currencies <.DXY> on
Tuesday, making dollar-denominated commodities more expensive
for holders of other units. []
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For a graphic showing the correlation between oil and the
dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
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A downward revision to the U.S. government's forecast for
2010 global demand growth also pressured crude.
The U.S. Energy Information Administration's monthly
short-term outlook lowered its forecast for increased
demand in 2010, and its forecast for OPEC and non-OPEC
production was higher.
"People were looking for U.S. oil demand to be higher and
so, with the cut in the EIA forecast and a smaller increase
overall, that's a little disappointing," Mark Waggoner,
president, Excel Futures, Huntington Beach, California.
U.S. stocks fell on Tuesday after a disappointing outlook
from 3M Co <MMM.N> and a second straight month of falling
domestic sales at McDonald's Corp <MCD.N> triggered concern
about consumer spending. []
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.
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 (2130 GMT) Tuesday, was
expected to show a 600,000-barrel build in crude stocks in the
week to Dec. 4 and a rise of 1.5 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.
(Additional reporting by Matthew Robinson, Gene Ramos and
Robert Gibbons in New York; Alex Lawler in London; Editing by
Walter Bagley and Lisa Shumaker)
