* Higher reserve ratios for Chinese banks take effect
* U.S. crude, gasoline stockpiles probably climbed
* Fed seen leaving interest rates steady (Recasts with
market reaction to China bank reserves)
By Alejandro Barbajosa
SINGAPORE, Jan 26 (Reuters) - Oil tumbled below $75 a
barrel on Tuesday, approaching one-month lows, after higher
reserve ratios for selected Chinese banks took effect,
rekindling concern that tightening measures by the world's
second-largest oil consumer would curb demand.
The Shanghai Composite Index fell more than 2 percent,
after China's central bank told the banks that needed to raise
their reserve ratios to make the change on Tuesday, banking
sources said. []
U.S. oil <CLc1> fell 76 cents to $74.50 a barrel by 0444
GMT. On Friday, it touched a one-month intraday low of $74.01,
retreating from a 15-month peak of $83.95 on Jan. 11. ICE
London Brent <LCOc1> declined 80 cents to $72.89.
"I believe it will take time to be able to see any good
recovery of the economy," said Ken Hasegawa, a commodity
derivatives manager at brokerage Newedge in Japan.
"There is still a lot of uncertainty in the stock market,"
Hasegawa said. For oil prices, "it's still possible to go down
to $70."
Crude oil inventories rose in the United States last week
as imports increased and refinery activity continued to falter,
a preliminary Reuters poll of analysts showed on Monday ahead
of weekly inventory reports. []
"From a fundamental point of view, the oil market is
oversupplied," Hasegawa said. "I don't think any supply fears
will happen against the data because of high inventories.
Downside is possible while upside in not."
U.S. crude stockpiles were projected to have risen by 1.7
million barrels in the week to Jan. 22 after they posted an
unexpected drawdown the week before, the poll of nine analysts
showed.
25-YEAR LOW
The survey also showed gasoline stockpiles climbed 1.4
million barrels, even as refinery utilisation rates probably
declined to 78.3 percent of capacity, their lowest level
outside a hurricane season in 25 years.
Industry group American Petroleum Institute will issue its
weekly inventory report on Tuesday at 2130 GMT. Government data
from the U.S. Energy Information Administration (EIA) will
follow on Wednesday.
Distillate stocks, which include heating oil and diesel,
were predicted down 1.4 million barrels, compared with a slump
of 3.3 million barrels a weak earlier, as temperatures across
the U.S. Northeast rebounded to unseasonably high levels.
Recent economic reports have raised doubts over the
strength of the recovery in the U.S. housing and labor markets,
and the Federal Reserves is not seen indicating that it will
raise its benchmark rate any time soon when it meets this week.
[]
The Federal Open Market Committee (FOMC), the Fed's
policy-setting group, will begin a two-day policy meeting on
Tuesday.
Data on Monday showing a record drop in December used home
sales cast doubt on the strength of a recent rebound in the
housing sector. []
"Participants want to see the decision of the FOMC
tomorrow," Hasegawa said. Before then, oil "will be trading
around this level of $75," he added.
About half of the crude oil spilled in a ship collision on
Saturday on the Sabine-Neches Waterway leading to four
refineries in Texas, was contained on Monday, and the key
shipping waterway will likely reopen on Thursday, the U.S.
Coast Guard said. []
Those four refineries account for about 6.5 percent of U.S.
refining capacity.
(Editing by Clarence Fernandez)
