European shares dip early as weak miners offset oils

                                
 By Sitaraman Shankar
                                
 LONDON, June 20 (Reuters) - European shares dipped in early
trade on Friday, led lower by mining stocks that fell on weaker
gold prices, while oils tracked crude, which resumed its rise.
                                
 At 0915 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was down 0.2 percent at 1,242.51 points, on
track for its third successive day of losses.
                                
 The index has lost 2 percent this week and nearly 7 percent
in June as investors worry over inflation and as concerns over
big losses at banks refuse to go away.
                                
 Mining stocks were lower, led by Anglo American <AAL.L> and
Eurasian Natural Resources <ENRC.L>, which fell 2 percent, while
Xstrata <XTA.L>, BHP Billiton <BLT.L> and Rio Tinto <RIO.L> fell
1.4-1.9 percent.
                                
 Gold traded below $900 an ounce, well away from a level
around $908 hit on Thursday, its strongest in more than a week.
                                
 But oil <CLc1> traded 70 cents higher at $132.63 a barrel
after falling nearly $5 on a Chinese move on Thursday to raise
prices, which investors saw as crimping demand.
                                
 Energy groups BP <BP.L>, Shell <RDSa.L> and Total <TOTF.PA>
gained 0.5 to 0.9 percent after sharp falls on Thursday.
                                
 Analysts said that the commodity moves notwithstanding,
banks continued to be top of investors' minds.
                                
 "I'd be happy to see a rebound in equities, but this is not
going to be easy," said Thierry Lacraz, strategist at Swiss bank
Pictet in Geneva.
                                
 "There is only one problem -- the banks, the banks, the
banks -- after the Citigroup warning yesterday and the Moody's
rating cuts for Ambac and MBIA."
                                
 On Thursday, Citigroup's finance head told investors that
the largest U.S. bank could have substantial subprime writedowns
in the second quarter.
                                
 The DJ Stoxx European banks index <.SX7P>, which has
plummeted nearly 30 percent this year, was trading little
changed on the day.
                                
 
                                
 INFLATION AND OIL
                                
 Oil has risen 40 percent so far this year, giving rise to
inflation worries and lifting government bond yields.
                                
 Underlining those concerns, data released on Friday showed
that German producer price inflation was at its highest level
since July 2006.
                                
 Producers and consumers meet in Saudi Arabia over the
weekend to discuss oil's surge, and Pictet's Lacraz said that
though the meeting would likely yield little in terms of moves
to curb prices, there were some hopes of a respite nevertheless.
                                
 "With the Chinese move, the fact that the demand from the
Olympics will taper off and the Saudi decision to raise
production earlier this week, we could see a weakening in oil,"
he said.
                                
 He said that even allowing for some non-fundamental factors,
a price of $100-$110 a barrel sounded more realistic.
                                
 Britain's FTSE 100 <.FTSE> and France's CAC <.FCHI> rose 0.2
percent, while Germany's DAX <.GDAXI> fell 0.1 percent.
 (Editing by Paul Bolding)