** European oil and oil stocks likely to test multi-yearlows again before a sustainable recovery, say traders
** Brent and WTI both fall by around 5 pct onWednesday after rising by 20 pct in the three previous tradingdays, a rally sparked by a greater-than-expected reduction inthe US rig count
** The 3-day rally in oil sparked a wave of index shortcovering that helped large-caps though with that buying supporthaving faded sellers of the rally back in control
** Oil support services and producers among top fallers onStoxx 600 on Tuesday: SBM, Subsea, Tullow and Premier Oil all down by more than 5 pct
** Stoxx 600 Oil and Gas index down 1.3 pct
** BAML said in a technical note on Tuesday $45.33 levellikely to be a consolidation point for WTI before renewedstalling - a call proven to be correct. Chart: http://link.reuters.com/dyh93w
** "The oil rally was sparked by hopes that all the capexcuts will lead to less supply - if that is the driver then it isnegative for oil service names," said a trader at a London-basedbroker (RM: alasdair.pal.thomsonreuters.com@reuters.net)