Oil slips as U.S crude

By Santosh Menon

LONDON (Reuters) - Oil eased towards $100 a barrel on Wednesday, reversing course from an early rally to record peaks after U.S. data showed a higher-than-expected rise in crude and gasoline stocks last week.

U.S. crude stood 55 cents down at $100.32 a barrel by 4:03 p.m. London Brent was 55 cents down at $98.92, off a record high of $100.53 hit earlier in the session.

U.S. oil earlier rallied to a new record of $102.08 a barrel, near its inflation-adjusted lifetime peak of $102.53, as a plunging U.S. dollar triggered a surge across commodities markets that are viewed as safe havens.

But U.S. government data showing substantial builds in crude oil and gasoline stocks once again raised concerns about the economy of the world's biggest oil consumer, and with it the prospects of future oil demand.

Crude oil stocks rose by 3.2 million barrels last week against expectations of a 2.5 million barrels build. Gasoline stocks jumped 2.3 million barrels against an expected 300,000 barrels increase, taking inventories to their highest level in 14 years.

"If you look at this report in isolation from what is going on with the dollar, it's pretty bearish. But the market can't take much focus off the dollar," said Amanda Kurzendoerfer at Summit Energy in Kentucky.

Mike Fitzpatrick at MF Global said: "This report should be enough to weigh down the market, but there is a lot of speculative money pouring into this market. Participants in this market are obviously focusing on more than just fundamentals."

WEAK DOLLAR