* European equities turn lower
* U.S. crude stocks expected to rise by 2.1 million barrels
* Flow through Kirkuk-Ceyhan pipeline resumes
* Stronger U.S. dollar pressures prices
(Updates prices, adds details, comment)
By David Sheppard
LONDON, April 7 (Reuters) - Oil fell below $50 a barrel on
Tuesday, tracking stock market losses in Europe and the United
States, as investors continued to track share movements to try
and gauge the strength of the global economy.
U.S. light crude for May delivery <CLc1> was down $1.52 at
$49.53 a barrel by 1420 GMT, having settled $1.46, or 2.78
percent, lower on Monday.
London Brent crude <LCOc1> fell $1.01 to $51.23.
Crude oil prices have been closely tracking the fortunes of
broader markets as investors look for clues as to when oil
demand might rebound.
"I think the road to recovery is a long one, and while we
await a recovery, global oil demand will be weak," Bache
Commodities broker Christopher Bellew said.
European shares opened higher but quickly turned lower on
Tuesday, falling for the third consecutive session as figures
showed the euro zone shrank by more than previously thought in
the fourth quarter. []
On Wall Street, the Standard & Poor's 500 Index fell by 2
percent, as investors turned cautious ahead of the start of the
first-quarter earnings reporting season and worries about the
health of the banking sector persisted. []
The global recession has cut oil demand around the world,
with consumption expected to be curbed for the first time since
the early 1980s.
The resumption of oil flow through the Kirkuk-Ceyhan oil
pipeline also pressured prices.
Oil flow through the pipeline, which carries more than a
fifth of Iraqi crude to the Turkish Mediterranean coast had
resumed on Monday, a source at the Turkish pipeline operator
told Reuters.
Strength in the dollar also weighed, as commodities prices
in the U.S. currency become more expensive for overseas
investors.
U.S. INVENTORIES
Little upside is expected from weekly U.S. inventories data
due on Tuesday and Wednesday, with oil analysts predicting yet
another increase in crude stocks because of high import levels
and weak demand from domestic refiners. []
A preliminary forecast of seven analysts called for a 2.1
million barrel rise in crude stocks, which are already running at
a 16-year high, according to the U.S. Energy Information
Administration (EIA).
"Investors are eyeing a potential build in U.S. crude
stocks, which should keep prices under pressure," said Andrey
Kryuchenkov, vice president commodities at VTB Capital in
London.
"After prices rose over the past couple of weeks the demand
situation is again encouraging a little profit-taking."
Gasoline stocks could fall by 1 million barrels, and
distillates by 0.4 million barrels, mainly due to lower refinery
production. Demand may have dipped too, analysts added.
The American Petroleum Institute will release its report on
Tuesday at 2030 GMT, while the EIA -- whose data is generally
seen as more comprehensive -- releases its report at 1530 GMT on
Wednesday.
Oil prices have gained roughly 40 percent since mid-February
as equities markets rose and OPEC producers cut output, though
oil's gains have been limited by continued weak global demand and
rising inventory levels.
(Additional reporting by Maryelle Demongeot in Singapore;
editing by James Jukwey)
