London oil falls, market awaits US gasoline data

LONDON, Apr 18 (Reuters) - Benchmark Brent crude oil fell for a third day on Wednesday as traders waited for U.S. data expected to show another drop in gasoline stocks in the world's top consumer ahead of peak summer demand.

London Brent crude was down 61 cents to $65.32 a barrel by 1042 after a fall of $1.32 on Tuesday. That brought the loss to over 5 percent this week, partly on news that Nigeria hopes to restart some fields shut by militant attacks.

U.S. crude was down 43 cents at $62.67 after losing 51 cents on Tuesday. Brent's faster drop has narrowed its premium over U.S.

crude, currently seen as a less reliable guide to world prices because of swollen stocks at its delivery hub.

Brent's fall has brought it towards the lower end of the $4 range where it has traded since late March.

"Perhaps it's a matter of some taking of profit ahead of the stats," said Harry Tchilinguirian of BNP Paribas. "People are waiting for statistics to show the relative strength of the gasoline market." An unexpectedly big fall in gasoline stocks shown by U.S.

data last week helped drive a rally in crude prices as the United States heads towards the summer, when more travel pushes up demand for the motor fuel.

Gasoline stockpiles are seen falling 2.1 million barrels in data due later on Wednesday, a Reuters survey of analysts showed, which would take stocks down for the 10th week on both strong demand and refinery glitches.

The survey forecast crude inventories would climb 500,000 barrels as imports rose to offset increased refinery production.

A leak in a pipeline carrying crude from Canada to the U.S.

Midwest on Sunday spurred worries over U.S. crude supplies, but Enbridge Inc. said the pipe could be restarted on Wednesday.

NIGERIA QUESTION Prospects have grown for more gasoline-rich oil from Nigeria after market sources said the 380,000 barrel per day (bpd) Forcados oilfields could start to come back onstream as early as this month, following a year's closure due to militant attacks.

"The news of the Forcados coming back on stream might have dampened sentiment towards Brent, but as far as I know it hasn't been confirmed yet," said Costanza Jacazio of Barclays Capital.

"It still has to be confirmed." Royal Dutch Shell, which operates Forcados, has yet to comment.

Dampening expectations a return of Forcados would mean more crude on the market, an official from the state oil firm said loading plans would be adjusted to meet Nigeria's OPEC target -- though the country has often pumped above quota.

Traders are still on alert over violence in Nigeria, fearing that presidential elections on April 21 could lead to more output disruptions in the world's eight biggest exporter.

Nigeria's government on Wednesday rejected an opposition call to postpone the presidential ballot after flawed state elections at the weekend. Troops battled Islamic militants in north Nigeria, but that is far from the coastal oil region.

Iraq's oil minister said on Wednesday the cabinet will present an oil law next week that aims to lure billions of dollars in foreign investment needed to boost oil output. Prime Minister Nuri al-Maliki said Iraq planned to take nationwide security control from foreign forces by the end of 2007.

REUTERS PBB ND1802