* Oil reverses earlier gain, down over 7 percent in July
* US gasoline stocks seen up for week of Independence Day
(Updates prices, recasts)
By Joe Brock and Ikuko Kao
LONDON, July 7 (Reuters) - Oil dipped below $63 a barrel on
Tuesday, pressured by investors' caution over prospects for
economic recovery and by an expected increase in U.S. gasoline
stocks for the week when Americans traditionally drive the most.
U.S. crude futures <CLc1> fell $1.17 to $62.88 a barrel by
1405 GMT, reversing an earlier gain to as high as $64.91. London
Brent crude <LCOc1> was 92 cents lower at $63.13.
Oil prices have fallen from $73 struck in late June, with
U.S. crude closing at $64.05 on Monday, its lowest settlement in
more than a month.
Market jitters over economic recovery and an expected
increase in U.S. gasoline stocks for the week of the July 4
Independence Day holiday pressured oil, said Harry
Tchilinguirian, senior oil analyst with BNP Paribas.
"Looking at another build in gasoline inventories, consumer
confidence is weighed down by higher retail prices and rising
unemployment and so the number of Americans taking to the road
over the holiday weekend was probably lower than last year,"
Tchilinguirian said.
"This is most likely part of the broader correction that we
have been seeing over the past trading sessions. People are
re-assessing the quality of the green shoots in the economy."
Analysts in a Reuters poll expected weekly data from the
American Petroleum Institute (API) and U.S. Energy Information
Administration to show increases by about 2.2 million barrels in
gasoline stocks.
The expected increases in gasoline and middle distillate
inventories are likely to overshadow any drop in crude
inventories. []
Industry group API will release its weekly crude and
products stocks data at 2030 GMT on Tuesday and the EIA on
Wednesday.
The EIA will release its monthly report later on Tuesday.
In June, it raised its forecast for 2009 world demand by
10,000 barrels per day (bpd) to 83.68 million bpd, the first
time since September that it had increased the demand estimate
in its rolling monthly forecast.
OIL PRICE REVISION
Despite the fall in July, oil prices have still risen from
below $33 in December last year.
Bank of America-Merrill Lynch said earlier on Tuesday it had
raised its oil price forecasts for 2009 to $59 a barrel for
Brent and to $58.50 for U.S. crude, up from forecasts of $52 for
both benchmarks. []
"Our price revisions come on the back of a weaker U.S.
dollar, a significant improvement in liquidity conditions for
the global economy, and a slightly tighter-than-expected global
oil market balance," the bank said.
Limited support also continued to come from Nigeria, where
militants have launched at least four attacks against oil
installations in the past 10 days, helping to underpin prices on
Tuesday.
The main militant group said on Monday it had sabotaged a
Chevron <CVX.N> oil facility and seized a chemical tanker and
six crew members. []
Royal Dutch Shell <RDSa.L> said there was no impact on its
Nigerian oil production from an attack to its oil field on
Sunday. []
(Additional reporting by Ikuko Kao, editing by Anthony Barker)
