* Oil pares losses after U.S. equities open firmer
* Euro hovers near four-year lows versus dollar
* Coming Up: U.S. API oil inventory report; 2030 GMT
By Emma Farge
(Updates prices, recasts, adds detail)
LONDON, June 2 (Reuters) - Oil prices hovered below $73 a barrel on Wednesday after an early rally in U.S. stocks eased concerns that the European debt crisis could fetter the still fragile global fuel demand recovery.
Investors have had less appetite for buying oil after a series of reports released the previous day showed manufacturing growth fell across the globe in May. []
But a rebound in U.S. stocks after Tuesday's steep sell-off caused prices to pare losses during the day. []
U.S. crude prices for July <CLc1> fell 7 cents to $72.51 a barrel at 1350 GMT, after losing nearly 2 percent on Tuesday in a volatile session where prices swung in a $4 range.
ICE Brent <LCOc1> rose 50 cents to $73.21 a barrel by the same time.
"The equities are recovering some of their losses. It will be very important to see what equities are doing as they have been an indicator for the level of risk aversion in the market," said Commerzbank analyst Eugen Weinberg.
Concerns about a reduction in future offshore output following the BP oil spill in the Gulf of Mexico may also be supporting prices, he said. []
Sentiment in the oil market turned sour in May, with U.S. crude posting a 14 percent loss during the month as the market weighed the impact of the spreading European debt crisis on demand in previously robust growth centres such as Asia.
In late May, money managers flushed out long positions in crude oil and this contributed to the sharpest monthly fall in prices since 2008. []
Since then, the euro has slid to a near four-year low against the dollar this week and this has quelled buying interest. <EUR=> A weak euro makes dollar-denominated oil more expensive for holders of the currency. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the performance of commodities so far this year, see here:
http://graphics.thomsonreuters.com/10/CMD_PRFG0510.html
For a graphic showing the technical outlook for U.S. crude, see here:
http://graphics.thomsonreuters.com/gfx/WT_20100206083914.jpg ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
NEW RANGE?
But for some, prices have already found a temporary floor and they now expect them to stabilise in a new range between $70-$75 a barrel.
"We could have some stability. The current level takes into account the fact that the recovery appears to be slowing but also the fact that we are not going to have a double dip," said analyst Christophe Barret at Credit Agricole CIB, adding the chances of a V-shaped recovery now seemed remote.
Technical chart analysts say oil prices could fall towards the next key support cushion of $70 a a barrel. []
This level is also the low point of the $70-$80 range that the Organization of the Petroleum Exporting Countries (OPEC) deems satisfactory for both producers and consumers.
OPEC's reference basket price on Tuesday was also above the critical $70 threshold at $70.98 a barrel, the group said on Wednesday. []
Analysts said the market was likely to focus on weekly stocks data out of the U.S. later on Wednesday for the next clue on demand prospects in the world's biggest oil consumer.
While the data is always a key market mover, this week's results are likely to be more closely scrutinised ahead of the U.S. gasoline season which officially began last weekend with the Memorial Day holiday.
U.S. crude oil inventories are forecast to have slipped by 200,000 barrels last week and gasoline stocks are expected to fall by 500,000 barrels. []
Industry group American Petroleum Institute will issue its report at 2030 GMT on Wednesday while the more authoritative data from the U.S. Energy Information Administration is delayed until 1500 GMT on Thursday because of a U.S. holiday on Monday. (Additional reporting by Alejandro Barbajosa in Singapore; editing by Keiron Henderson)
