UPDATE 9-U.S. and Brent oil down on profit-taking, strong dollar
* Brent moves briefly back over $110, then loses momentum
* U.S. crude inventories seen down last week
* Market await OPEC meeting Wednesday (Adds detail on spread between US and Brent crude)
By Lorenzo Ligato
NEW YORK, June 10 (Reuters) - Brent crude reversed course to end down on Tuesday, while U.S. oil also fell due to a stronger dollar and profit taking by traders following strong gains on Monday.
Brent futures closed at $109.99 on Monday, the highest in nearly two weeks, supported by positive economic data from China and the United States, the world's two largest energy consumers.
But momentum stalled on Tuesday as Brent rose above $110, only to later drop below the key mark, despite positive economic data.
"A strong dollar and a not-so-strong stock market are double trouble for energy prices," said Walter Zimmerman, chief technical analyst at United-ICAP.
Brent settled down 47 cents at $109.52 a barrel on Tuesday, after hitting a high of $110.32. U.S. oil slipped 6 cents to settle at $104.35 a barrel after ending up 1.7 percent on Monday, its biggest daily gain since April.
The spread CL-LCO1=R between the two benchmarks, which has been narrowing over the past two weeks, closed at $5.17, its lowest point since April 15.
Analysts polled by Reuters expected a weekly inventory report to show a 1.5 million-barrel drop in U.S. crude stocks, signaling healthy consumption as the summer driving season gets under way.
The American Petroleum Institute will release its inventory data at 4:35 p.m. EDT (2035 GMT) on Tuesday, followed by data from the U.S. Energy Information Administration on Wednesday.
China's central bank on Monday announced a package to relax policy in weaker areas of the economy including farming and small- and medium-sized companies, an action that was expected to promote growth and potentially bolster fuel demand.
The oil market was on alert for any surprises from the Organization of the Petroleum Exporting Countries (OPEC), which meets in Vienna on Wednesday to decide oil output targets.
The cartel, which pumps a third of the world's oil, has said it is happy with global oil prices and is expected to maintain its production target at 30 million bpd.
"We're starting to see global demand pick up a pace and get stronger," said Carl Larry, chief executive of consultancy Oil Outlooks in Houston. "My expectation is that the big talk tomorrow will be about spare capacity."
United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday that oil prices are at a suitable level for OPEC members and the group sees no shortage of supply, "Oil prices have been steady over the past period and at a comfortable level for all members."
Libyan Oil Minister Omar Shakmak agreed, saying an oil price close to $110 a barrel is good for the oil market. "It's for the benefit of producers and customers alike." (Additional reporting by Christopher Johnson in London and Manash Goswami in Singapore; Editing Peter Galloway and Alden Bentley)
- Exclusive: Angry with Washington, 1 in 4 Americans open to secession
- Scots spurn independence in historic vote, nationalist leader resigns |
- Eight bodies found after attack on Guinea Ebola education team
- Alibaba surges on massive demand in trading debut |
- Special Report: Scotland stays in UK, but Britain faces change