* Dollar strengthens to 5-month high vs. euro
* China bank lending curbs cause jitters
* U.S. inventory reports expected to show build in stocks
(Updates prices, adds detail; changes dateline from LONDON)
By Edward McAllister
NEW YORK, Jan 20 (Reuters) - Oil prices fell toward $77 a
barrel on Wednesday as the dollar strengthened and Wall Street
slipped on worries about domestic bank results and bank lending
curbs in China.
U.S. crude contract for February delivery <CLc1>, expiring
Wednesday, fell $1.93 to $77.09 a barrel by 12:06 p.m. EST
(1706 GMT). March crude <CLc2> fell $1.88 to $77.44. In London,
Brent crude <LCOc1> for March delivery fell $1.60 to $76.03 a
barrel.
U.S. equities fell on Wednesday as quarterly results from
three big U.S. banks raised concerns about the stability of the
sector. [] New U.S. housing starts unexpectedly fell in
December [], while U.S. producer prices rose 0.2
percent last month. []
Investors have looked to wider data over the past year for
signs of economic recovery and a potential rebound in energy
demand.
"The petroleum markets continue to take much of their
guidance from the financial markets, with both the retreat in
the equity markets and the firmer U.S. dollar prompting
short-term traders to sell petroleum," said Tim Evans, energy
analyst at Citi Futures Perspective in New York.
Book squaring on front-month February crude ahead of expiry
was contributing to the day's volatility, Evans added.
The euro fell to fresh five month lows against the dollar
on Wednesday as markets worried about Greece's public finances
[]. Over the past year, oil prices have frequently weakened
as the dollar firmed, at times signaling a flight to safer
havens by investors.
"We're starting to see the commodity trade come off, mostly
on the stronger dollar," said market analyst Michael Hewson at
CMC Markets in London.
CHINESE CREDIT
Chinese banking authorities instructed some major banks to
stop new lending for the rest of January, after loan growth
surged in the first few weeks of the year, official media and
banking sources said on Wednesday. []
Last week China raised bank reserve requirements for the
first time since June 2008. []
"China's plans to tighten credit markets continue to cause
concern, meaning that the release of GDP and other economic
data tomorrow will have to be very bullish to offset this,"
said David Wech, head of energy studies at JBC Energy in
Vienna.
China's December economic indicators will be published late
on Wednesday. Analysts say Chinese industrial production
probably grew at its fastest pace in almost four years, jumping
by 20 percent in the year to December, compared with a reading
of 19.2 percent in November. []
RISING STOCKPILES
Separately, U.S. crude inventories likely rose for a third
straight week as imports increased and refinery utilization
fell with the start of the maintenance season, a preliminary
Reuters poll of analysts showed. []
U.S. inventory reports were expected from the American
Petroleum Institute later on Wednesday and from the Energy
Information Administration on Thursday.
U.S. crude stockpiles were expected to have gained 2.5
million barrels on average in the week ended Jan. 15, a survey
of eight analysts showed.
Distillate stocks were projected up 400,000 barrels, with
heating oil demand expected to have fallen amid moderating
winter temperatures in the U.S. Northeast. Gasoline stocks
probably rose 1.9 million barrels.
The country's refinery utilization was forecast to have
fallen 0.3 percentage point to 81 percent of capacity.
Some U.S. refineries have begun their first-quarter
maintenance, with the goal of retooling for gasoline production
ahead of the summer driving season.
(Additional reporting by Gene Ramos in New York, Chris Baldwin
in London and Alejandro Barbajosa in Singapore; Editing by
Walter Bagley)
