European shares turn negative as banks weigh

FRANKFURT, May 21 (Reuters) - European shares dipped back into negative territory by midday on Wednesday, weighed down by banks and automotive stocks and an oil price at lifetime highs.

By 1029 GMT, the pan-European FTSEurofirst 300 index was down 0.3 percent at 1,346.71 points, having risen earlier to as high as 1,355.69 points, rebounding from its worst sell-off in two months in the previous session.

The DJ Stoxx European bank index was down 1.6 percent with UBS down 3.4 percent. The bank made a huge loan to Blackrock (BLK.N: Quote, Profile, Research, Stock Buzz) so that the U.S. asset manager could buy $15 billion of distressed assets from the Swiss bank, easing the strain on UBS's balance sheet, but not freeing it from the risk.

The oil price climbed to a lifetime high above $130 a barrel, driven higher by a combination of long-term production worries and a near-term focus on tight fuel stocks. U.S. crude CLc1 was up 1.17 cents at $130.17.

Daimler (DAIGn.DE: Quote, Profile, Research, Stock Buzz) was down 2.3 percent, Porsche (PSHG_p.DE: Quote, Profile, Research, Stock Buzz) down 4.8 percent and Renault (RENA.PA: Quote, Profile, Research, Stock Buzz) fell 3.1 percent.

(Reporting by Eva Kuehnen)