NYMEX-U.S. crude dips as China hikes interest rate

China raises interest rate, fourth hike since October

N. Africa, Mideast unrest remain supportive to oil

Coming up: API oil data, 4:30 p.m. EDT

Tuesday NEW YORK, April 5 (Reuters) - U.S. crude oil futures prices edged lower on Tuesday, hovering just under the 2-1/2-year peak reached the previous session, pressured by an interest rate hike in China though concerns about Middle East and Libya and potential supply disruptions limited losses. A price dip on Tuesday would come after prices rose three consecutive sessions. U.S. crude oil inventories were expected to have risen 1.4 million barrels last week, a preliminary Reuters survey of analysts on Monday said.

[EIA/S] Total distillate stocks were expected to be down slightly, by 200,000 barrels, with gasoline seen down 1.9 million barrels. Refinery capacity use was expected to be up 0.6 percentage point. The American Petroleum Institute, an industry group, will release weekly oil inventory data at 4:30 p.m. EDT (2030 GMT) on Tuesday. The government's report from the U.S. Energy Information Administration will follow at 10:30 a.m. EDT (1430 GMT) on Wednesday. FUNDAMENTALS

On the New York Mercantile Exchange, May crude CLK1 fell 31 cents, 0.3 percent, to $108.16 a barrel by 8:37 a.m. EDT (1237 GMT), trading from $107.50 to $108.45.

A Western air strike destroyed two of Muammar Gaddafi's military vehicles in the east Libyan oil town of Brega, allowing rebels to edge forward, but diplomatic efforts to end the war remained stalled.

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China's central bank increased interest rates for the fourth time since October. [ID:nL3E7F51LX]

Oil prices could leap to $200 to $300 a barrel if Saudi Arabia is hit by serious political unrest, former Saudi oil minister Sheikh Zaki Yamani told Reuters. [ID:nLDE7340MU]

Oil companies operating in Gabon expect crude output to be back to normal within days after the oil employees' union agreed to end a four-day strike. [ID:nLDE7340MT]

Social tension in China remains an investment risk as strong demand for coal, grains and copper pushes up commodity raw material prices, Jing Ulrich, J.P. Morgan China managing director, told a conference.

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Yemen accepted an invitation by Gulf Arab states to talks on its weeks-old political crisis as pressure mounted on President Ali Abdullah Saleh to accept a power transition that would end his 32-year rule.

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Three people died and 15 were wounded when supporters of Yemen President Ali Abdullah Saleh clashed with protesters demanding his ouster and an army unit defending them, the defense ministry said.

[ID:nLDE73412I] MARKETS NEWS

U.S. stock index futures fell after China, a main source of global growth, raised its interest rates, while Apple shares fell after the stock's weight in a widely followed index was cut. [ID:nN0594713]

The euro came off a five-month high versus the dollar, knocked by a Portugal ratings downgrade and a rise in Chinese interest rates. [FRX/]

Gold prices eased after China raised interest rates for the second time this year, though euro zone debt concerns and elevated oil prices limited losses. [GOL/]

Copper fell on demand concerns, as top metals consumer China raised interest rates and inventories rose in Asia, while strong oil prices fanned worries inflation could hamper global growth. [MET/L] UPCOMING DATA/EVENTS

The U.S. Institute of Supply Management's March non-manufacturing business activity index at 1000 EDT (1400 GMT) is expected at 65.5, down from 66.9 in February.

American Petroleum Institute weekly oil inventory data due at 4:30 p.m. EDT (2030 GMT) on Tuesday.

U.S. Energy Information Administration oil inventory data due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

8:37     LAST     NET    PCT     LOW    HIGH  CURRENT  DAY AGO

              CHNG   CHNG                      VOL      VOL
CLc1   108.16   -0.31  -0.3%  107.50  108.45   32,615  283,710
CLc2   108.75   -0.30  -0.3%  108.08  109.02    9,175   97,213
LCOc1  121.13    0.07   0.1%  119.95  121.42   52,670  172,877
RBc1   3.1650 -0.0038  -0.1%  3.1463  3.1708    2,830   52,136
RBc2   3.1494 -0.0018  -0.1%  3.1264  3.1520    1,787   29,023
HOc1   3.1617 -0.0097  -0.3%  3.1436  3.1675    2,047   42,461
HOc2   3.1727 -0.0087  -0.3%  3.1545  3.1783      912   16,524
 * NYMEX crude oil for May CLc1 fell 31 cents to $108.16 a barrel by 8:37
a.m. in volume of 32,615 lots.

(Source: http://www.reuters.com/article/2011/04/05/markets-energy-nymex-idUSN0531803920110405)