* Oil surges to above $73 before turning lower
* U.S. crude inventory data eyed on Tuesday, Wednesday
* Trade volume more than 10 times Asia norm, Brent in focus
(Recasts, adds quote, updates prices)
By Joe Brock
LONDON, June 30 (Reuters) - Oil prices gave away early gains
on Tuesday, easing towards $71 a barrel ahead of U.S. inventory
data expected to show a rise in oil product stocks.
Earlier, prices leapt more than $1.50 in under half an hour
around 0200 GMT as volumes traded on Brent and then U.S. crude
oil surged to more than 10 times the norm.
The jump was thought to have been led by a sudden spike in
Brent buying pinned on fund positioning.
Both prices and volumes cooled in European trade. U.S. crude
for August delivery <CLc1> fell 12 cents at $71.37 a barrel by
1117 GMT, off its earlier eight-month high of $73.38.
Brent was down 20 cents to $70.79 a barrel.
Christopher Bellew, broker at Bache Commodities said of the
turnaround on crude prices: "Speculative buying maybe drying up
and it could also be the prospect of product stock builds in the
stats tonight."
Crude and oil products inventory numbers from the United
States will be carefully watched on Tuesday and Wednesday for
the latest indication of demand from the world's biggest fuel
consumer.
A Reuters poll of analysts ahead of weekly data forecast
U.S. crude stockpiles fell by 1.6 million barrels last week,
while gasoline stocks were seen up 2 million barrels and
distillate stocks rose 1.5 million barrels. []
The American Petroleum Institute will release its weekly
U.S. inventory at 2030 GMT, while the U.S. Energy Information
Administration report is due out on Wednesday.
HIGH ASIAN VOLUMES
Driven by hopes of a global economic recovery, oil prices
are on track to post a near 50 percent increase in the second
quarter, the highest quarterly percentage gain since 1990.
Oil has rallied on hopes for an improving economic outlook
and a growing appetite for risk among investors, a factor given
further impetus by Asian and U.S. stock market gains.
Earlier on Tuesday, prices surged on unusually high Asian
trading volumes, which some traders attributed to big fund
players in the market.
"This could be end of quarter movement, and traders are
trying to push prices higher and then selling before closing
their books," said Mark Pervan, senior commodities analyst at
ANZ Bank. "I haven't seen any new catalyst on the news front."
Oil prices were also supported by a weaker U.S. dollar on
Tuesday, which can make commodities denominated in the currency
more attractive to investors.
Unrest in Africa's top producer Nigeria has helped to
underpin oil's gains this week as it increases expectations of a
tightening of oil supplies from the region.
The country's main militant group said on Monday its
fighters had attacked an oil facility belonging to Royal Dutch
Shell <RDSa.L> days after President Umaru Yar'Adua proposed an
amnesty. []
(Editing by James Jukwey)
