UPDATE 2-Oil recovers above $110 as dollar cedes early gains

                                
 (Recasts lead, updates prices in paragraph 2-3, euro paragraph
5)
                                
 SINGAPORE, April 14 (Reuters) - Oil recouped early losses
to stand around $110 a barrel on Monday after initial dollar
gains faded, despite an unexpected warning from the Group of
Seven nations against excessive currency fluctuations.
                                
 U.S. light, sweet crude oil futures for May delivery <CLc1>
were 5 cents lower at $110.09 by 0704 GMT, bouncing back from
an earlier low of $109.56. Prices hit a record high $112.21 a
barrel on Wednesday after a big fall in U.S. oil stocks.
[EIA/S]
                                
 London Brent <LCOc1> crude fell 15 cents to $108.60 a
barrel.
                                
 After meeting on Friday, G7 finance ministers and central
bankers issued a statement saying they were concerned by the
sharp moves in foreign exchange markets in recent weeks. That
was a marked change in their tone and was taken as a warning
that the dollar was falling too fast. [ID:nN11451639]
                                
 The euro fell sharply in Asian trade on Monday but later
pared those losses to stand around $1.5760, only slightly down
from $1.5835 late in New York on Friday. [ID:nHKG85940]
                                
 Other commodity markets including gold <XAU=> and corn
<Cc1> also pared or reversed earlier losses as traders bet the
dollar's early rebound could be a short-lived reaction to G7
talk, doing little to change the greenback's long-term decline.
                                
 But gains were held in check by the growing gloom over the
outlook for the U.S. economy following a nasty earnings
surprise from General Electric Co <GE.N> and a drop in U.S.
consumer confidence to its lowest in more than a quarter
century.
                                
 "With the headwinds in the global crude oil market starting
to blow harder, the smooth sailing days for crude oil prices
may be coming to an end," Martin King, analyst with First
Energy Capital, wrote in a report.
                                
 The dollar had fallen on Friday, offsetting the bearish
impact of the sharpest one-off cut in the International Energy
Agency's global oil demand growth forecast since 2001.
                                
 The energy watchdog slashed its 2008 global oil consumption
forecast by 460,000 barrels per day (bpd) to 1.27 million bpd
due to high prices and the faltering U.S. economy, but said
demand from China and the Middle East remained largely intact.
[IEA/M]
                                
 On the supply side, Shell Oil Co said the 667-mile (1,073
kilometre) Capline crude oil pipeline, which brings crude from
the Gulf of Mexico to the U.S. Midwest, remained shut on Sunday
afternoon as work continued to repair a leak. It could not
estimate when the line would return to service. [ID:nN13281874]
                                
 Short-term speculators in the crude oil market, who had
sharply cut their bullish bets since mid-March, increased their
net long positions in the week to April 8, according to
regulatory data released on Friday.
                                
 Net crude long positions rose to 64,699 lots, up from
47,073 in the previous week, the CFTC reported, just as U.S.
oil prices rallied to a record high on Wednesday.
[ID:nN11285756]
 (Reporting by Jonathan Leff; Editing by Michael Urquhart)