* Huge weekly US gasoline stock build sparks selling
* Weekly EIA data due at 1430 GMT may confirm bearish
outlook
* Weak dollar, Nigeria supply disruption to support prices
(Updates prices, adds Kuwait)
By Jennifer Tan
SINGAPORE, June 24 (Reuters) - Oil slid back below $69 a
barrel on Wednesday, reversing a 2.6 percent gain the day
before, after data showed a surge in U.S. gasoline stocks,
signalling weaker-than-expected demand from the world's top
energy user.
The market awaits confirmation of the American Petroleum
Institute's (API) bearish figures with the release of the U.S.
Energy Information Administration's (EIA) own data later.
U.S. economic figures due later will shed more light on the
health of the U.S. economy. May durable goods orders and new
home sales figures could show the recession might be near a
bottom, but a firm rebound is likely to be slow to emerge.
By 0700 GMT, U.S. crude <CLc1> for August delivery was down
38 cents at $68.86, off a morning low of $68.06, after settling
at $69.24 on Tuesday. London Brent crude <LCOc1> fell 43 cents
to $68.37, off an early low of $67.58.
"We're seeing potentially the third week in a row of
increased gasoline stocks, which is a cautious sign, and would
indicate that demand conditions are not that strong, and the
U.S. driving season is not panning out as expected," said Mark
Pervan, senior commodity strategist with ANZ Bank.
"Prices have run up very strongly, so there's a natural
pullback. Fundamentally, the market may be swinging towards
focusing more on negative data which it has ignored in the last
few weeks, and the API data could be the trigger," he added.
Pervan expects crude to trade between $62 and $69 a barrel
over the next week.
WEAK DOLLAR SUPPORTS
Oil prices have more than doubled since last winter's low
$30s as investors have started to price in expectations for an
economic recovery which should boost consumption.
API data on Tuesday showed U.S. crude stocks fell 72,000
barrels last week, far less than expectations of a
1-million-barrel decline in a Reuters poll. []
Gasoline stocks surged 3.7 million barrels against
expectations of a 1.3-million-barrel increase, as refiners
raised utilisation rates and product imports rose.
[]
The Commerce Department will release U.S. May durable goods
orders at 1230 GMT. Economists polled by Reuters expect a fall
in orders of 0.6 percent versus a rise of 1.7 percent in April.
U.S. new home sales for May are expected to rise to 360,000
annualised units versus 352,000 in April, a Reuters poll
showed.
But oil is likely to be buoyed by a softer U.S. dollar and
supply disruptions from OPEC member Nigeria.
The dollar hovered at its lowest levels for a week against
the euro on Wednesday after tumbling sharply across the board,
as the market braced for the Federal Reserve to dampen
expectations for higher interest rates at the end of its
meeting later. []
Italian oil company ENI declared force majeure on shipments
of Brass River crude oil from Nigeria, while Royal Dutch Shell
<RDSa.L> said it was checking its oil operations in the Niger
Delta after militants claimed they launched three attacks
against its facilities at the weekend. []
[]
Kuwait's oil minister said OPEC would not cut output at its
meeting in September. Kuwait was pleased with the strength of
the oil price this month and was unconcerned by the recent
fall, Sheikh Ahmad al-Abdullah al-Sabah told reporters.
[]
(Editing by Ben Tan)
