* Market awaits EIA weekly inventory data at 1430 GMT
* OPEC lowers its medium and long term demand forecasts
* G8 meets in Italy, focus on regulation
(Updates throughout)
By Christopher Johnson and Barbara Lewis
LONDON (Reuters) - Oil fell towards $62 a barrel on
Wednesday, placing it on course for a sixth consecutive fall and
the longest losing streak since mid-December, after the focus
sharpened on economic weakness and data showed higher fuel
stocks.
An OPEC report predicting it could take years for demand for
its crude to recover from the financial crisis added to bearish
sentiment [], while modest support came from
continued disruption of Nigerian supplies by militant violence.
U.S. light crude for August delivery <CLc1> dropped 41 cents
to $62.52 a barrel by 1109 GMT. It settled $1.12 lower at 62.93
a barrel on Tuesday, ending a fifth straight day of losses.
London Brent crude <LCOc1> eased by 26 cents to $62.97.
The market was waiting for the next set of U.S. government
inventory data at 1430 GMT. It was expected to show gasoline
inventories have risen for a fourth straight week. []
Distillate inventories, including diesel, were also
projected to have risen, while crude stocks were forecast to be
lower as refiners cut imports because of modest demand.
Figures from the American Petroleum Institute (API) late on
Tuesday showed distillate stocks and gasoline stocks had risen
more than expected. []
"It looked like gasoline demand had started to get better
and now suddenly looks bad. It could be for a couple of reasons:
it could be a price response or it could just be that the
economy is just not out of the woods yet," said Tony Nunan, risk
manager at Mitsubishi Corp in Tokyo.
Prices have dropped from peaks above $70 a barrel last
month, the highest this year, as expectations of an early
economic recovery have faltered and U.S. fuel stocks have risen.
REGULATORY FEARS
The market also watched the meeting of the Group of Eight
major industrialised nations in the central Italian city of
L'Aquila, which continues until Friday.
Oil analysts largely dismissed the G8 calls for reduced
volatility in energy markets [].
They said U.S. regulator the CFTC's statement this week it
was considering tougher position limits to try to curb
speculation [] was far more significant. It could
add to selling pressure, although it would take months for any
regulatory changes to take effect, they said.
"It does dampen sentiment," said Mike Wittner of Societe
Generale.
Analysts said the impact would be greater on U.S. crude than
on the European benchmark Brent, which is mostly overseen by
British regulator the FSA.
Brent's current premium to U.S. crude could also be
explained by disruption of supplies of Nigerian oil, which has
helped to boost other Atlantic basin crudes, including Brent.
Nigeria's most prominent militant group said on Wednesday it
had sabotaged oil pipelines, as it deepened a six-week long
offensive against Africa's biggest energy industry.
[]
The enforced shut-in of Nigerian crude has helped to tighten
supplies from the Organization of the Petroleum Exporting
Countries.
Discipline from the group had lapsed, with compliance with
agreed output curbs estimated at around 75 percent, down from
peaks of 80 percent earlier this year.
OPEC's 2009 World Oil Outlook released on Wednesday said
consumption of its crude would not return to 31 million barrels
per day (bpd), the level it averaged in 2008 before the economic
crisis cut oil use, until 2013.
In the medium term, consumption would fall to 84.2 million
bpd this year from 85.6 million bpd last year, and rise to 87.9
million bpd by 2013, the report said. The 2013 figure was 5.7
million bpd less than previously expected.
(Additional reporting by Maryelle Demongeot in Singapore;
editing by William Hardy)
