* Record U.S. crude stocks weigh despite gasoline draw
* Crude pares losses as dollar slides against euro
* OPEC meeting on output freeze unlikely without Iran
(New throughout, updates prices and market activity after euro
rebound)
By Barani Krishnan
NEW YORK, March 10 (Reuters) - Oil prices fell on Thursday,
with U.S. crude retreating from three-month highs as refinery
maintenance threatened to further raise record U.S. inventories
of crude, while sources said an OPEC production freeze meeting
was unlikely without Iran's participation.
Crude prices pared losses as the dollar weakened. .DXY Oil
buyers using the euro EUR= benefited from its rally after the
European Central Bank (ECB) ruled out further rate cuts after
bringing its key lending rate to zero. FRX/
Global oil benchmark Brent LCOc1 was down 90 cents at
$40.17 a barrel by 12:58 p.m. EST (1758 GMT), off the session
low of $39.63.
U.S. crude CLc1 slid 40 cents to $37.89 per barrel, having
recovered from an intraday low of $37.21.
On Wednesday, oil rallied as much as 5 percent, with U.S.
crude hitting three-month highs of $38.51 a barrel as a big
gasoline inventory drawdown overshadowed record high crude
stockpiles. EIA/S
On Thursday, some analysts said last week's gasoline stock
draw, which was triple expectations, could be partly due to the
market transitioning from winter-grade to summer-grade motor
fuel. They also said the U.S. refinery maintenance season could
push crude stockpiles to even bigger highs.
Some analysts fear that despite the big U.S. draw, gasoline
stocks remained high on both sides of the Atlantic, which could
undercut a sustained recovery in oil prices. Crude's 30 percent
rise in the last month was partly based on hopes that drivers
would soak up the surfeit in the fuel.
"The gasoline drawdown is great but we still have record
high crude stocks. The question is whether we are just going to
depend on falling U.S. production to bring that down, or OPEC
will also get its act together on an output freeze," said David
Thompson at Washington-based commodities brokerage Powerhouse.
A meeting between oil producers to discuss a global pact on
freezing production is unlikely to take place in Russia on March
20, sources familiar with the matter said, noting that OPEC
member Iran had yet to say whether it would participate in such
a deal.
"The idea that meeting may not happen at all is definitely
weighing on the market," said Tariq Zahir, who mostly trades
U.S. crude oil spreads for Tyche Capital Advisors in New York.