* China tops U.S. as largest energy user -IEA
* For a technical view, click: []
* Coming Up: API U.S. inventory report; 2030 GMT
(Updates lead paragraphs, prices)
By David Turner
LONDON, July 20 (Reuters) - Oil fell on Tuesday, pressured
by a decline in European stock markets and a sharp drop in US
housing starts but prices found some support from expectations
of lower crude inventories.
European <> shares declined, dragged lower by weakness
in bank stocks, which were weakened by Goldman Sachs'
announcement of lower second-quarter earnings. <GS.N> []
US macro-economic data also hit the oil price, with housing
starts falling by 5 per cent to their lowest level in eight
months, according to the US Commerce Department. []
Fears of a double-dip recession have periodically hit global
stock markets over the past few months and slides in equities
have soured sentiment towards oil. [] []
U.S. crude for August delivery <CLc1> fell 42 cents to $76.12
a barrel by 1311 GMT. The August U.S. crude contract expires on
Tuesday. The more liquid September future <CLc2> was trading 42
cents lower at $76.48.
Front-month ICE Brent crude <LCOc1> was down 42 cents to
$75.20.
Commenting on current oil price trends, Michael Hewson of
CMC Markets in London said: "It's very recovery-driven." He
added: "I certainly think it's about perceptions of whether the
global economy is going to double dip".
INVENTORIES
U.S. crude inventories fell 1 million barrels on average
last week, according to a Reuters survey on Monday. The poll
also predicted that stockpiles of distillate fuel, including
heating oil and diesel, rose 1.6 million barrels, extending the
build-up to the eighth straight week. []
While the forecasts for a fourth consecutive weekly drop in
U.S. crude inventories were supportive, they were countered by
bearish predictions of a rise in oil products in the data from
the American Petroleum Institute, due out at 2030 GMT. []
The U.S. Department of Energy will publish its own oil
statistics on Wednesday at 1430 GMT. []
Prices have been stuck in a range between $71 and $80 for
more than six weeks as volatility related to the European debt
crisis has dwindled. A tighter crude market has been offset by
weaker U.S. macroeconomic indicators, signalling a slower
recovery in the world's largest economy.
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For a graphic on volatility in oil prices, click on
(http://graphics.thomsonreuters.com/ce/VOL-HRZN.pdf)
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Adding some support for oil, a tropical wave centred around
Puerto Rico had a 40 percent chance of becoming a tropic
depression, the U.S. National Hurricane Center said on Tuesday.
[]
The Hurricane Center has forecast this year's Atlantic storm
season may be the most intense since 2005, when hurricanes
Katrina and Rita nearly paralysed the Gulf of Mexico U.S. oil
industry for weeks, boosting oil prices.
China overtook the United States last year to become the
world's largest energy user, according to a Financial Times
report on Monday, citing the International Energy Agency.
China's rise to the top ranking was faster than had been
expected in part because the United States has outpaced China in
improving energy efficiency measures over the past decade.
But a senior Chinese official on Tuesday questioned the
IEA's conclusion that China had overtaken the United States.
The IEA has had a relatively high estimate of China's energy
consumption and carbon dioxide emissions, said Zhou Xian,
spokesperson for China's top energy agency. But he declined to
give alternative estimates. []
(Reporting by David Turner; editing by Christopher Johnson and
Anthony Barker)
