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Oil report

Tokyo rubber stays near 6-week low, capped by oil

TOKYO, July 17 (Reuters) - Tokyo rubber futures were mostly lower on Thursday, hovering near a six-week low marked the previous day.

* While aggressive selling was curbed after a fall totalling 5 percent in three days, weakness in crude oil put a lid on any strong gains.

* The key Tokyo Commodity Exchange rubber contract for December delivery <0#JRU:> was down 0.4 yen at 328.8 yen a kg as of 0030 GMT. Other contracts ranged from down 0.8 yen to up 0.8 yen.

* The December contract touched a six-week intraday low of 326.7 yen on Wednesday as investors stepped up selling to limit losses after a large drop in oil prices.

* Last week an oil-led rally helped the December contract to break above 346 yen, up more than 4 percent from a trough of 332.7 yen hit on July 9. Costly oil makes synthetic rubber, a petroleum product, more expensive and encourages the use of natural rubber.

* U.S. crude CLc1 was up 45 cents at $135.05 a barrel on the Globex electronic trading platform on Thursday after falling more than $10 in total in the previous two sessions. Wednesday's losses came after U.S. data showing crude inventories rose, while a weak U.S. economic outlook kept investors worried about demand from the world's biggest energy user.

* The downside of Tokyo rubber futures is seen limited by recent firmness in physical rubber prices due to tight raw material supply. (Reporting by Risa Maeda)

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