Oil sinks for third day, U.S. stockbuild expected

SINGAPORE, June 14 (Reuters) Oil fell for a third day on Wednesday, down to a three and a half week low near a barrel, after interest rate fears triggered a commodities-wide sell-off and on forecasts for a rise in fuel stocks in the United States.

U.S. light sweet crude futures fell 41 cents, or 0.6 percent, to .15 a barrel in electronic trading, deepening the week's losses to nearly 5 percent and taking prices away from their record-high touched in April.

Brent crude lost 42 cents to .50 a barrel.

Commodities have crumbled this week, with copper extending Tuesday's 7 percent drop and gold 23 percent off its 26-year peak as risk-averse investors fear a global move to tighter monetary policy will slow economies and crimp demand. WRAP] Oil, the biggest component of several major indexes used by investors to gain commodities exposure, has been dragged down as well, although persisting risks around Iran, the Atlantic hurricane season and resurgent Asian oil demand checked losses.

''Oil won't ignore the broader commodities move, it's too important a part of the indexes,'' said Tobin Gorey, a commodities analyst at Commonwealth Bank of Australia.

''(But) we expect there would have been a broader move without the Iran situation.'' Dealers are anxiously awaiting Tehran's formal response to a package of incentives offered by world powers in an attempt to end the stand-off over its atomic programme, which has heightened concerns over Iran's crude exports and Gulf supplies.

The 35-nation board of the International Atomic Energy Agency (IAEA) meets in Vienna on Thursday to debate the dispute, but no resolutions are expected.

STOCKBUILD SEEN U.S. gasoline futures led the market's fall on Tuesday, tumbling 3.4 percent after analysts forecast a 1.1 million-barrel build in U.S. inventories in the week to June 9, a seventh consecutive rise.

S] Gasoline fell 1.18 cents to SINGAPORE, June 14 (Reuters) Oil fell for a third day on Wednesday, down to a three and a half week low near $68 a barrel, after interest rate fears triggered a commodities-wide sell-off and on forecasts for a rise in fuel stocks in the United States.

U.S. light sweet crude futures fell 41 cents, or 0.6 percent, to $68.15 a barrel in electronic trading, deepening the week's losses to nearly 5 percent and taking prices $7 away from their record-high touched in April.

Brent crude lost 42 cents to $66.50 a barrel.

Commodities have crumbled this week, with copper extending Tuesday's 7 percent drop and gold 23 percent off its 26-year peak as risk-averse investors fear a global move to tighter monetary policy will slow economies and crimp demand. WRAP] Oil, the biggest component of several major indexes used by investors to gain commodities exposure, has been dragged down as well, although persisting risks around Iran, the Atlantic hurricane season and resurgent Asian oil demand checked losses.

''Oil won't ignore the broader commodities move, it's too important a part of the indexes,'' said Tobin Gorey, a commodities analyst at Commonwealth Bank of Australia.

''(But) we expect there would have been a broader move without the Iran situation.'' Dealers are anxiously awaiting Tehran's formal response to a package of incentives offered by world powers in an attempt to end the stand-off over its atomic programme, which has heightened concerns over Iran's crude exports and Gulf supplies.

The 35-nation board of the International Atomic Energy Agency (IAEA) meets in Vienna on Thursday to debate the dispute, but no resolutions are expected.

STOCKBUILD SEEN U.S. gasoline futures led the market's fall on Tuesday, tumbling 3.4 percent after analysts forecast a 1.1 million-barrel build in U.S. inventories in the week to June 9, a seventh consecutive rise.

S] Gasoline fell 1.18 cents to $2.0400 a gallon on Wednesday.

The data, due at 1430 GMT, are also expected to show a mild draw of 100,000 barrels in crude stocks and a 1.6 million barrel increase in distillate stocks, a poll of analysts showed.

The first tropical storm of the Atlantic hurricane season, Alberto, had briefly supported prices early this week, but faded from the market's radar completely after making landfall in northwest Florida on Tuesday, safely east of oil infrastructure.

Still, prices are up 12 percent so far this year, keeping the Organization of the Petroleum Exporting Countries (OPEC) on edge about a switch to alternative energies that would undermine future demand for crude.

Qatar Oil Minister Abdullah al-Attiyah said on Tuesday that oil at $50-$55 a barrel would be ideal for the producers' cartel.

REUTERS SRS PM1022 .0400 a gallon on Wednesday.

The data, due at 1430 GMT, are also expected to show a mild draw of 100,000 barrels in crude stocks and a 1.6 million barrel increase in distillate stocks, a poll of analysts showed.

The first tropical storm of the Atlantic hurricane season, Alberto, had briefly supported prices early this week, but faded from the market's radar completely after making landfall in northwest Florida on Tuesday, safely east of oil infrastructure.

Still, prices are up 12 percent so far this year, keeping the Organization of the Petroleum Exporting Countries (OPEC) on edge about a switch to alternative energies that would undermine future demand for crude.

Qatar Oil Minister Abdullah al-Attiyah said on Tuesday that oil at - a barrel would be ideal for the producers' cartel.

REUTERS SRS PM1022