U.S. Oil Bounces after Three Straight Declines

NEW YORK, June 12 (Xinhua) -- U.S. crude oil price rose on Tuesday after earlier losses, snapping the three-day declining streak.

Oil was still pressured by contagion concerns about European debt crisis and expectation of continuing high output from OPEC.

The U.S. crude benchmark WTI dipped to as low as 81.07 dollars a barrel before it rallied boosted by the increase of the broad equity markets. Meanwhile, the Brent crude was still on the track of fourth straight day of losses.

On Tuesday, ratings agency Fitch cut the ratings of 18 more Spanish banks, one day after the firm cut Spain's two biggest banks' ratings and one week after it lowered Spain's sovereign debt ratings to BBB from A.

Although European finance ministers agreed to inject up to 100 billion euros to Spain's banks, investors still lacked confidence in the solution to the region's debt problems. Moreover, investors worried that the euro zone's third largest economy Italy could also be infected and be forced to ask for financial help.

To add to the pressure, Saudi Arabia, the OPEC's largest oil exporter was still satisfied with current production level amid the recent sharp retreat in oil prices, even though there was voice calling for output reduction.

Investors expected that OPEC would either keep the output targets unchanged or raise the targets at the meeting on Thursday in Vienna.

On the economic front, the Labor Department said that import prices recorded their biggest decline in almost two years as energy and food costs fell 1.0 percent in May. Export prices slipped 0.4 percent, the first drop since December.

Light, sweet crude for July delivery added 62 cents, or 0.75 percent to settle at 83.32 dollars a barrel on the New York Mercantile Exchange, after trading from 81.07 dollars to 83.72 dollars. In London, Brent crude for July delivery declined 86 cents, or 0.88 percent to close at 97.14 dollars a barrel.