* Spain's bank takeover weakens euro, curbs oil rise
* Libya oil minister says OPEC concerned about price fall
* Coming up: API oil inventory data; Tuesday 4:30 p.m. EDT
(Recasts, updates with settlement prices)
By Robert Gibbons
NEW YORK, May 24 (Reuters) - U.S. crude oil futures edged
up on Monday as buyers found prices near $70 a barrel
attractive after their drop from above $87 in a span of three
weeks.
News that Spain's central bank took over savings bank
CajaSur [] highlighted concerns that Europe's debt
crisis may spread and curb economic recovery and demand growth,
tempering oil's strength.
U.S. crude <CLc1> rose 17 cents, or 0.24 percent, to settle
at $70.21 a barrel, ranging from $69.57 to $70.96. In London,
ICE Brent crude <LCOc1> fell 51 cents to settle at $71.17 a
barrel.
"The market has dropped so sharply that it may be trying to
find a bottom around $70. It shrugged off the dollar's
strength," said Gene McGillian, analyst at Tradition Energy in
Stamford, Connecticut.
Last Thursday's $64.24 front-month crude intraday low price
was the weakest since prices fell to $62.76 on July 30, 2009.
Crude oil futures prices have slumped from an $87.13
intraday peak on May 3, the highest since prices reached $89.92
on Oct. 9, 2008.
"Oil futures are up but the market still has fears.
Earlier, it was the news from Spain on the takeover of a small
bank and now it's back to China as investors wonder if it will
take steps that would pull down its economy," said Phil Flynn,
analyst at PFGBest Research in Chicago.
The euro fell broadly, pulling back from gains last week,
after the Spanish central bank's takeover of a savings bank
added to jitters about debt problems in some of the weak euro
zone countries. []
The dollar strengthened against a basket of currencies
<.DXY>
The Nasdaq gained after positive broker comments lifted
technology shares, but the concerns about Europe's banking
system restrained the Dow and the S&P 500 indexes. []
BRENT PREMIUM TO WTI EASES
As traders wait to see if Europe's current financial
troubles hit oil demand, Brent crude's premium to U.S.
benchmark West Texas Intermediate narrowed from $1.64 on Friday
to 96 cents on Monday, based on settlement prices.
That puts Brent's premium at its weakest level since April
14 when it stood at 29 cents.
"Brent's weakness may be because the two factors that had
Brent higher were North Sea production down because of
maintenance, and that's coming to an end, and the Cushing
inventories which have been priced in," McGillian said.
Total U.S. crude inventories have been rising and stocks at
the delivery hub for U.S. futures contracts in Cushing,
Oklahoma, are at a record high.
Oil markets remain well supplied with the Organization of
the Petroleum Exporting Countries pumping about 2 million
barrels per day above output targets.
"The fundamentals of oil haven't suddenly changed. There's
still plenty of oil about," said Rob Montefusco, a commodity
broker at Sucden Financial.
While oil hovers near the low end of the $70-$80 range many
in OPEC have said they prefer, OPEC officials have not yet
called for any steps to prop up prices. The group is not
scheduled to meet until October.
Shokri Ghanem, the chairman of Libya's National Oil Corp,
said that OPEC was very worried about falling oil prices and
was watching them closely. []
Ahead of weekly reports on U.S. oil inventories, a Reuters
survey of analysts on Monday yielded a forecast for crude
stocks to have been little changed last week, estimated down
only 100,000 barrels. []
Distillate stocks were expected to be slightly higher and
gasoline stocks unchanged.
Trading sources cited the heightened tensions between South
Korea and North Korea [] and Iran's ongoing
dispute over its nuclear program [] as providing
some support to oil on Monday.
(Additional reporting by Gene Ramos in New York, Alex Lawler
in London and Fayen Wong in Perth; Editing by Marguerita Choy
and Jim Marshall)
