* Worries about global recovery, euro zone weigh on markets
* China January official PMI posts first dip in eight months
* Obama's first budget to paint grim fiscal picture - source
(Updates throughout, previous PERTH)
By Christopher Johnson
LONDON, Feb 1 (Reuters) - Oil steadied around $73 per barrel
on Monday, stabilising after three weeks of falls, with the
outlook still clouded by the outlook for global growth and
sluggish fuel demand.
Fresh economic data out of China, the world's second-largest
energy consumer, heightened concerns that Beijing would further
tighten monetary policy. []
Economists say tighter Chinese monetary policy could choke
off economic recovery if it reins in domestic consumption.
U.S. crude for March delivery <CLc1> rose 8 cents to $72.97
a barrel by 0932 GMT. Prices touched $72.43 on Jan. 29, the
lowest intraday price since Dec. 21. London Brent crude <LCOc1>
rose 14 cents to $71.60.
Prices rose briefly earlier on Monday following a fire at a
crude oil storage tank in Kuwait. State-run Kuwait Oil Co was
said the fire was under contraol and there was no impact on
production, state news agency KUNA said. []
Oil prices ended January down more than 8 percent, pressured
by data showing tepid energy demand in the United States,
worries about fiscal turmoil in smaller euro zone countries and
a stronger U.S. dollar.
"RETRENCHMENT IN LENGTH"
Edward Meir, analyst at brokers MF Global, said he expected
oil to start the week lower as a recent rally in the dollar
takes its toll. Commodities prices sometimes move inversely to
the dollar as they are priced in the U.S. currency. []
"There is not much encouraging on the energy charts either,"
Meir said. "Most complexes have either broken, or are close to
breaking, key uptrend lines."
"More disturbingly, the latest CFTC net noncommercial
position reports reveal that there has hardly been a sizable
retrenchment in length this past week in crude oil and gasoline,
implying that further selling could easily come our way if more
of the "stale" longs start heading for the exits."
Money managers cut net long crude oil futures position on
the New York Mercantile Exchange in the week to Jan. 26, the
Commodity Futures Trading Commission said. []
Markets are bracing for economic data this week culminating
in non-farm payrolls on Friday. [].
The White House will predict a $1.6 trillion U.S. budget
deficit in the 2010 fiscal year, a record and the biggest since
World War Two as a share of the economy, a congressional source
told Reuters on Sunday. []
A key U.S. January manufacturing report later on Monday is
expected to give a reading of 55.2, showing an expanding sector
for the sixth straight month.
European shares fell in early trade on Monday, with banks
under pressure and mining shares tracking lower metals prices.
By 0908 GMT, the pan-European FTSEurofirst 300 <> index of
top shares was down 0.5 percent at 1,006.72 points. []
Asian stocks slid on Monday after suffering their worst
monthly drop in a year, while the U.S. dollar gathered steam, as
fiscal worries in the euro zone prompted investors to add to
short positions in the single currency. []
BP Plc <BP.L> reports results on Tuesday and Royal Dutch
Shell <RDSa.L> follows with its data on Thursday.
Shell said on Sunday it had shut three oil flow stations in
Nigeria's Niger Delta after a key crude oil pipeline was
sabotaged. []
(Additional reporting by Fayen Wong in Perth; editing by
William Hardy)
