Crude ends lower as Wall Street sags

NEW YORK (Reuters) - U.S. crude oil futures ended lower on Monday in choppy trading, weighed by Wall Street's dip on profit-taking after a four-week rally.

"Some things to consider here," said Phil Flynn, analyst at PFGBest Research in Chicago. "Has the oil market priced in expectations of an economic recovery? Or is the market fearful of higher interest rates? On fundamentals, it's harder and harder for the oil market to stay up because we have high inventories in a period of low demand."

U.S. stocks extended their losses as retailers faltered and investors booked profits after a four-week rally. .N The decline follows Friday's sharp advance, when the Standard & Poor's 500 Index climbed to a 10-month high.

The dollar gained for the third straight day against a basket of currencies as investors continued to trade on strong U.S. jobs numbers from Friday while awaiting the Federal Reserve's statement after its two-day policy meeting that ends on Wednesday.

Heating oil and gasoline futures ended higher ahead of weekly inventory reports forecast to show that distillate and gasoline stocks fell last week. Distillates include heating oil and diesel fuel.

A preliminary Reuters poll ahead of the industry and government reports forecast an 800,000 barrel increase in crude stocks, a 100,000 barrel drop in distillates supplies and a 1.2 million barrel decline in gasoline inventories.

PRICES

* On the New York Mercantile Exchange, September crude settled down 33 cents, or 0.47 percent, at $70.60 a barrel, trading from $70.09 to $71.57.

* In London, September Brent crude was little changed and settled down 9 cents, or 0.12 percent, at $73.50 a barrel, trading from $73.04 to $74.26.

* NYMEX September RBOB ended up 1.93 cents, or 0.96 percent, at $2.0274 a gallon, trading from $1.9884 to $2.0374.

* NYMEX September heating oil finished up 1.54 cents, or 0.81 percent, at $1.9276 a gallon, trading from $1.9042 to $1.9398.

* The September/September RBOB crack spread ended at $14.55, rising from $13.41 on Friday. The September/September heating oil crack spread ended at $10.36, up from $9.38 on Friday.

* The spread between the current front month and the five-year forward crude contract ended at $16.75, widening from $15.82 on Friday. The September 2014 contract Monday settled at $87.35, up 60 cents, or 0.69 percent.

TECHNICALS

NYMEX crude 10-day/20-day moving average: $69.55/$66.99

Technical support/resistance:

NYMEX crude: $70.00/$73.38

NYMEX heating oil: $1.8899/$1.9835

NYMEX RBOB: $2.00/$2.1090

MARKET NEWS

* A low pressure system west-southwest of the Cape Verde Islands could develop into the first tropical cyclone of the Atlantic hurricane season during the next two days, the U.S. National Hurricane Center said Monday.

* Saudi Arabia will keep crude oil supplies to Asia and Europe steady in September, sources said.

(Reporting by Gene Ramos and Robert Gibbons; Editing by Lisa Shumaker)