NYMEX-Crude down for 3rd day on Spain bailout concerns

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FUNDAMENTALS

* NYMEX crude for September delivery had dropped 11 cents to $88.03 a barrel by 2354 GMT, after settling down $3.69 at $88.14 on Monday.

Crude prices hit eight-week highs on Thursday before concerns about Spain heightened.

* London Brent crude for September delivery was untraded so far, after settling down $3.57 at $103.26.

* Spain's economy sank deeper into recession in the second quarter, its central bank said on Monday, as investors spooked by a funding crisis in its regions pushed the country ever closer to a full bailout.

Economic output shrank by 0.4 percent in the three months from April to June having slumped by 0.3 percent in the first quarter, the Bank of Spain said in its monthly report.

* U.S. commercial crude oil stockpiles were forecast to have remained unchanged for the week to July 20 as a fall in imports was offset by lower utilization rates, while gasoline inventories were forecast to have dipped slightly, a preliminary Reuters poll showed on Monday.

* Also weighing on oil prices over the weekend, an adviser to the People's Bank of China said economic growth in the No. 2 oil consuming nation may slow more in the third quarter.

* Moderating recent threats from Iranian officials about shutting the vital oil shipping lane, a military commander was quoted on Monday as saying Iran would not close the Strait of Hormuz as long as it is able to use the lane itself.

MARKETS NEWS

* U.S. stocks fell for a second straight session on Monday on worries over Spain, while the euro dropped to a two-year low against the U.S. dollar and a nearly 12-year trough against the yen.

DATA/EVENTS

* The following data is expected on Tuesday: (Time in GMT)

- 0758 Euro Zone Markit Mfg flash PMI July

- 1145 US ICSC chain stores w/e

- 1245 US Fed Chairman Bernanke speaks

- 1255 US Redbook retail sales w/e

- 1258 US Markit Mfg PMI July

- 1400 US Monthly Home Price May

- 1400 US Rich Fed comp.

Index July

- 2030 American Petroleum Institute oil report w/e (Reporting by Osamu Tsukimori; Editing by Joseph Radford)

Energy