UPDATE 9-Oil dips on U.S. budget worries, gasoline rises

Tue Nov 27, 2012 5:26pm EST

Related Topics

* Greek debt deal gets mixed reception
    * OECD: Risk of serious global recession cannot be ruled out
    * Coming Up: EIA weekly oil data 10:30 a.m. EST Wednesday

 (Adds trading volume, API data paragraphs 9,11-15)
    By Robert Gibbons and Matthew Robinson
    NEW YORK, Nov 27 (Reuters) - Oil prices fell on Tuesday,
weighed down for a second straight day by concerns about key
U.S. budget talks, while gasoline futures got a boost from low
inventory levels.
    As markets cautiously greeted news of a deal to release
emergency aid to debt-laden Greece, oil traders eyed the looming
U.S. "fiscal cliff" as the latest sign struggling fuel demand
could face further headwinds.
    The U.S. Congress showed signs of advancing toward a
compromise on taxes and spending, but a firm deal by the end of
the year appeared distant and Senate Majority Leader Harry Reid
expressed disappointment with the talks. 
    Greece's international lenders agreed to a package of
measures to reduce Greek debt by 40 billion euros, cutting it to
124 percent of gross domestic product by 2020, but analysts
warned the deal did not spell the end to Europe's problems.
    "The euro zone still has growth issues even if we accept the
Greek deal as enough to sustain financial stability and keep
Greece in the European Union," said Tim Evans, an energy analyst
for Citi Futures Perspective.
    Unlike most of the oil complex, front-month December
gasoline futures posted a slight gain as investors eyed low
inventory levels on the East Coast - which includes the New York
Harbor delivery point for the contract.
    The contract is set to expire on Friday, and Evans noted the
stock shortfall in the region has helped boost gasoline futures
as they headed into expiry over the past two months.
    Brent January crude fell $1.05 to settle at $109.87
a barrel, having rebounded after testing support at the 20-day
moving average around $109.35 a barrel earlier in the day. 
    U.S. January crude lost 56 cents to $87.18 a barrel.
December RBOB gasoline futures rose 0.1 percent, while
heating oil fell 1 percent.
    Crude trading volumes were again light, with U.S. turnover
lagging its 30-day average by 33 percent and Brent dealings 25
percent below its 30-day average.
    Adding to bearish sentiment, the Organization for Economic
Cooperation and Development (OECD) cut its global growth
forecasts, saying the debt crisis in the recession-riddled euro
zone is the greatest threat to the world economy. 
    Traders received their first snapshot of weekly U.S. oil
inventory data late on Tuesday.
    U.S. crude stocks rose 2.0 million barrels last week, the
American Petroleum Institute (API) said on Tuesday. Gasoline
stocks rose 2.3 million barrels and distillate stockpiles rose
268,000 barrels, the API said. 
    Crude stocks were expected to be up only 300,000 barrels and
gasoline up 900,000 barrels, a Reuters survey of analysts showed
ahead of the API report. 
    Distillate stocks were expected to be down slightly, by
200,000 barrels.
    The U.S. Energy Information Administration (EIA) report on
inventories will follow at 10:30 a.m. EST (1530 GMT) on
Wednesday.

    

    MIDDLE EAST TURMOIL
    Investors also kept watch on the political crisis in Egypt,
which has exacerbated concern about potential disruptions to oil
supplies in the Middle East.
    Opponents of Egyptian President Mohamed Mursi rallied in
Cairo's Tahrir Square for a fifth day on Tuesday, stepping up
calls to scrap a decree they say threatens Egypt with a new era
of autocracy. 
    Syrian war planes attacked towns in the country's north and
east as fighting raged in the capital Damascus on Tuesday,
opposition activists said. 
    Bombs targeting ethnic Kurds killed four people on Tuesday
in the city of Kirkuk in Iraq's disputed northern territories,
where the Iraqi army and troops from the autonomous Kurdistan
region have been in a stand-off for more than a week.
 

 (Reporting by Robert Gibbons and Matthew Robinson in New York,
Peg Mackey in London and Luke Pachymuthu in Singapore; Editing
by John Wallace, Maureen Bavdek, Sofina Mirza-Reid and David
Gregorio)
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