* US crude stocks down sharply, products jump
* Dollar shows wide gains after Fed holds rates unchanged
* Nigerian president may propose amnesty to stem attacks
(Updates prices, adds Fed decision, OPEC comments, byline)
By Matthew Robinson
NEW YORK, June 24 (Reuters) - Oil prices fell on Wednesday as
the stronger dollar and rising U.S. product stocks outweighed
supply concerns from Nigeria.
U.S. gasoline stocks rose by 3.9 million barrels in the week
to June 19, well above analysts' forecasts, as refiners cranked up
output in the midst of the summer driving season.
Distillate stocks hit 10-year highs, while crude stocks showed
a steep drop. []
U.S. crude <CLc1> settled 57 cents lower at $68.67 a barrel,
reversing earlier gains. London Brent crude <LCOc1> fell 47 cents
to $68.33 a barrel.
"Crude futures are back down on the weight of a stronger
dollar," said Mark Waggoner, Excel Futures President from
Huntington Beach, California.
"The EIA inventory report also showed large increases in
gasoline and distillate stocks and that's dragging down crude."
The U.S. dollar extended gains against the euro and the yen on
Wednesday after the Federal Reserve's Federal Open Market
Committee left interest rates unchanged as expected but removed
the warning that inflation could be undesirably low. [] The
rising dollar can pressure commodities denominated in the
greenback.
Optimism over a potential economic recovery boosting weak oil
demand has lifted prices from below $40 a barrel over the past
three months.
However, crude imports by No. 3 consumer Japan fell by 18.8
percent in May against last year, according to government data.
[] EIA data showed total U.S. demand down 6.6 percent in
the four weeks to June 19, compared with year-ago levels.
GEOPOLITICAL CONCERNS
Multiple militant attacks on pipelines and oil installations
in OPEC member Nigeria recently have forced production stoppages
at sites run by Agip <ENI.MI>, Chevron <CVX.N> and Royal Dutch
Shell <RDSa.L>, stoking supply concerns. []
A senior official said Nigeria's president will propose a
60-day amnesty program for militants in the Niger Delta on
Thursday, in an effort to end years of attacks on Africa's biggest
oil and gas industry. []
Traders were also keeping an eye on the worst civil unrest in
30 years in Iran, the world's fifth-largest oil exporter, over a
disputed presidential election. []
Iran's Supreme Leader Ayatollah Ali Khamenei declared on
Wednesday that a disputed election result would stand.
[]
Venezuela said OPEC was hoping for oil prices up to $75 a
barrel by the end of the year, but added global inventories
remained very high. []
The producer group agreed a series of production cuts last
year to help stem oil's slide from record highs near $150 a
barrel. Kuwait's oil minister said on Wednesday the time was not
right for OPEC to boost oil production, however. []
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos in
New York and Christopher Balwin in London)
