MTECHTIPS:-U.S. crude back below $40 as oil erases early gains on glut worry

MTECHTIPS:-U.S. crude back below $40 as oil erases early gains on glut worry

MTECHTIPS-Oil prices fell more than 1 percent on Tuesday, erasing early gains and pushing U.S. crude back below $40 a barrel as persistent worries of a glut offset the impact of a weak dollar that initially propped the market. A slide in U.S. equities also forced U.S. crude futures, which plunged below the $40 level on Monday for the first time since April, to give back early gains of as much as 2 percent, traders said. "There is much talk about the product glut replacing the oil glut, and this is a worrisome indicator for crude demand," said Frank Plump, oil analyst at Stuttgart-based Landes bank Baden-Nuremberg. U.S. West Texas Intermediate (WTI) crude was down 50 cents, or 1.3 percent, to $39.56 a barrel by 12:15 p.m. EDT (1615 GMT). It had risen to $40.91 earlier. Brent crude fell 30 cents, or 0.7 percent, to $41.84 a barrel, after rising to $43.18 earlier. The dollar hit a six-week low, propping oil initially, before U.S. stocks fell to a three-week trough, mitigating the rebound. [USD/] (N) "I am bullish here overall but worry about being too early," said Scott Shelton, energy futures broker at  in Durham, North Carolina. "I also wonder if the market is going to chop around a bit first, like it did in late May to June before dropping after many threw in the towel." Oil hit 2016 highs above $50 a barrel between late May and June as crude supplies tightened from disruptions in Canada, Nigeria and 

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