SEOUL, Aug 7 (Reuters) - U.S. crude slipped below $92 per
barrel on Tuesday after gaining almost 6 percent in the last two
sessions, but hopes that Europe will take further action to
tackle its debt crisis and ongoing turmoil in the Middle East
are expected to support prices.
FUNDAMENTALS
* U.S. September crude dropped 29 cents to $91.91 a
barrel as of 0051 GMT, after two straight sessions of gains. It
closed higher on Monday at $92.20, highest for front-month U.S.
crude since July 19.
* Brent September crude also shed 19 cents at
$109.36 after settling at $109.55, the highest close for
front-month Brent since May 16.
* Oil prices should draw some support from improved
sentiment in financial markets after yields in Spain and Italy
inched lower on Monday on hopes the European Central Bank will
follow through with last week's statement that hinted at
upcoming policy steps to contain Madrid's surging borrowing
costs.
* In the Middle East, Syria's prime minister fled the
country on Monday, denouncing the "terrorist regime" of Bashar
al-Assad as the United States hailed the highest level
government defection as a sign the Syrian president was losing
his grip.
* Iran, a close ally of Syrian President Bashar al-Assad,
plans to host a meeting of regional and other countries this
week on ways to resolve the country's conflict, the official
IRNA news agency reported on Monday.
* New York's top bank regulator threatened to strip the
state banking license of Standard Chartered Plc, saying
it was a "rogue institution" that hid $250 billion in
transactions tied to Iran, in violation of U.S. law.
* U.S. crude stockpiles were forecast down last week for a
second straight time on lower refinery activity, a preliminary
Reuters poll showed ahead of industry and government data due
this week. The American Petroleum Institute, an industry group,
will release its report on Tuesday at 2030 GMT.
* Tropical Storm Ernesto strengthened in the western
Caribbean Sea on Monday and was forecast to become a hurricane
and smack into Mexico's Yucatan Peninsula, U.S. forecasters
said. They said it was too early to know if it could disrupt oil
and gas operations in the gulf.
* Market participants are now waiting for key China data on
Thursday for signs the world's second-largest economy and top
energy consumer has improved from a lacklustre first half.
MARKETS NEWS
* The euro and commodity currencies held near multi-week
highs on Tuesday, though a lack of fresh news out of the euro
zone and a dearth of major economic data led to a draining of
momentum from the market.
* The Nikkei share average steadied in early trade on
Tuesday after the previous session's sharp rally and ahead of
this week's Bank of Japan policy meeting and a slew of economic
data from China, Japan's largest export market.
* U.S. stocks closed at three-month highs for the second day
in a row on Monday, extending last week's rally on the hope for
more assistance for the troubled euro zone.
DATA/EVENTS
* The following data is expected on Tuesday (GMT):
0430 Australia RBA cash rate Aug
0800 Italy Industrial output yy WDA Jun
0900 Italy GDP prelim yy Jul
1145 U.S. ICSC chain stores yy Weekly
2030 U.S. API weekly crude stocks Weekly
2030 U.S. API weekly dist. stocks Weekly
2030 U.S. API weekly gasoline stk Weekly
2350 Japan Bank lending yy Jul
(Reporting by Meeyoung Cho; Editing by Himani Sarkar)