June 5, 2012 / 12:41 PM / 6 years ago

UPDATE 9-Brent little changed, U.S. crude posts gain

 * U.S. service sector gauge up in May, supportive to oil
 * All of the euro zone's major economies in decline -PMI
 * Coming up: EIA oil data 10:30 a.m. EDT Wednesday

 (Adds API data paragraphs 17-20)	
 By Robert Gibbons	
 NEW YORK, June 5 (Reuters) - Brent crude prices dipped a
penny in choppy trade o n T uesday, while U.S. crude rose for a
second day as supportive U.S. data countered pressure from
another batch of weak euro zone figures that reinforced concerns
about future demand for petroleum.    	
 Price consolidation should be expected, analysts and traders
said, after Brent crude dropped below $100 a barrel on Friday
for the first time since October. It has retreated from a 2012
peak above $128 a barrel in March.	
 They also noted that price drops during the session did not
threaten multimonth lows posted on Monday.	
 "It has come off a long way, maybe now it's time to
consolidate," said Tony Machacek, oil futures broker at
Jefferies Bache.	
 Crude futures and equities prices received a lift from an
industry report showing growth in the U.S. services sector
picked up slightly in May. 	
 Brent July crude dipped 1 cent to settle at $98.84 a
barrel. The session low of $97.68 was nowhere near Monday's
16-month low of $95.63.	
 U.S. July crude edged up 31 cents to settle at
$84.29, falling only to $83.31 intraday, well above Monday's
$81.21 low.	
 Total Brent crude trading volume lagged U.S. crude turnover,
with Britain's celebration of Queen Elizabeth's 60 years on the
throne thinning trade. Both Brent and U.S. dealings trailed
their 30-day averages.	
 Oil prices near $100 a barrel remain a threat to a slowing
global economy, the International Energy Agency's executive
director said on Tuesday. 	
 The dollar's strength helped limit oil price gains as
the euro fell, after hitting a one-week high against the dollar,
when Spain said high borrowing costs mean the country is
effectively shut out of the bond market and the European Union
should help recapitalize Spain's banks.  	
 The lack of an official joint statement after a
teleconference held by Group of Seven finance ministers to
discuss the euro zone crisis dashed expectations the call would
result in dramatic initiatives.  	
 Investors awaited results from Wednesday's European Central
Bank (ECB) policy meeting and the Bank of England's on Thursday.	
 Also on tap is Federal Reserve Chairman Ben Bernanke's 
Thursday testimony before a congressional panel as investors 
sift central bank tea leaves for any clues about plans for
bolstering a faltering economic recovery.	
 "G7 guidance ... failed to offer any major surprises and the
market appears to be in holding pattern awaiting tomorrow's ECB
indications," Jim Ritterbusch, president at Ritterbusch &
Associates, said in a note.	
                 	
 	
 	
 FALTERING EURO ZONE	
 Fanning concerns about global oil demand growth, euro zone
retail sales fell more than expected in April, sliding by the
biggest margin so far this year. 	
 Purchasing managers indexes from Markit showed all the
bloc's major economies are in various states of decline and the
vast private economy shrank in May at the fastest pace in nearly
three years. 	
 	
 U.S. OIL INVENTORIES	
 U.S. crude oil stocks fell 1.8 million barrels last week,
according to a report from industry group American Petroleum
Institute. 	
 While total inventories fell, stocks at the Cushing,
Oklahoma, hub rose 929,000 barrels, the API said, even with the
Seaway pipeline reversed to bring crude to the Gulf Coast.	
 Gasoline stocks rose 1.4 million barrels and distillate
stockpiles rose 1.8 million barrels, the API said.	
 Ahead of the API data, U.S. crude stocks were expected to
have fallen 500,000 barrels, a Reuters survey of analysts
showed. Gasoline stocks were seen up 700,000 barrels and
distillate stocks up 300,000 barrels. 	
 A separate report from MasterCard showed U.S. retail
gasoline demand fell last week versus the previous week and
against the year-ago period. 	
 The Energy Information Administration's (EIA) inventory
report follows on Wednesday at 10:30 a.m. EDT (1430 GMT).	
 The EIA has reported 10 consecutive stock builds that have
left U.S. commercial inventories at their highest since 1990.	
         	
 IRAN ASSERTS NUCLEAR RIGHTS	
 While the euro zone's debt crisis, sputtering U.S. jobs
growth and China's slowing factory sector have hogged the
spotlight and pressured oil and other commodities, the dispute
over Iran's nuclear program remains unresolved.	
 An embargo on Iranian crude oil by the European Union
remains set for July and on Tuesday a source at Turkey's only
refiner said the country has steeply cut imports from Iran in
May and June as U.S.-led sanctions tighten. 	
 The U.N.'s International Atomic Energy Agency and Iran hold
a second round of talks in Vienna on Friday. 	
 Iran and the six powers -- the United States, France,
Russia,  China, Germany and Britain -- will meet for a third
time this year in Moscow on June 18-19 to discuss the nuclear
issue after making little progress at their most recent meeting.	
	
 (Additional reporting by Gene Ramos in New York, Jessica Donati
in London, Randy Fabi in Singapore and Florence Tan and Simon
Webb in Kuala Lumpur; editing by Sofina Mirza-Reid, Marguerita
Choy and Jim Marshall)	
 

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