By Alejandro Barbajosa
SINGAPORE, Dec 8 (Reuters) - Oil fell for a second day on
Wednesday on concern about the long-term health of U.S.
finances and after an industry report showed a
larger-than-expected increase in the country's gasoline
stockpiles.
A jump in U.S. bond yields continued to boost the dollar
after the administration of President Barack Obama proposed to
extend Bush-era tax cuts, prompting oil investors to cash in
after prices jumped to a 26-month high near $91 on Tuesday.
FUNDAMENTALS
* U.S. crude for January <CLc1> fell 40 cents to $88.29 a
barrel at 0122 GMT, after touching $90.76 on Tuesday, the
highest price since October 2008. ICE Brent <LCOc1> fell 54
cents to $90.85.
* Although U.S. crude oil inventories fell much more than
expected last week, refined product stocks rose as refinery
utilization rates surged, the American Petroleum Institute
(API) said on Tuesday.
* Crude inventories fell 7.3 million barrels in the week
through Dec. 3, compared with analyst expectations for a 1.3
million barrel drop in a Reuters poll.
* But gasoline inventories rose 4.8 million barrels,
compared with analyst expectations of a 500,000 barrel
increase, while stocks of distillate fuels including heating
oil and diesel rose 1.7 million barrels, against an average
forecast for a 500,000 barrel decline.
* Government data on stocks and demand is due on Wednesday
from the Energy Information Administration at 15:30 GMT.
* The U.S. government on Tuesday left its forecast for
world oil demand growth in 2011 virtually unchanged, as it
lifted its outlook for oil supplies from non-OPEC countries
this year.
* The Energy Information Administration said it expected
world oil consumption to rise 1.43 million barrels per day
next year, down 10,000 bpd from the 1.44 million bpd increase
it projected last month.
* Iran's OPEC governor described the world oil market as
balanced, with the current price of around $90 a result of
supply being in line with demand, the Oil Ministry news agency
Shana reported on Tuesday. []
MARKETS NEWS
* The U.S. dollar rose in early Asia on Wednesday and
looked set to climb further in the short term, having powered
across the board overnight on the back of a spike in U.S. bond
yields.
* U.S. government bond prices fell sharply on Tuesday amid
worries over the fiscal outlook, while Wall Street stocks
ended up only slightly on concern about the impact of higher
long-term rates.
* Japan's Nikkei rose over 1 percent on Wednesday, hitting
its highest level in almost seven months.
(GMT) DATA/EVENTS
0300 Japan PAJ weekly oil inventory data Dec 4
1100 Germany Industrial output mm Oct
1200 U.S. Mortgage index Weekly
1530 U.S. EIA weekly oil stocks Dec 3
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(Editing by Ed Lane)
