* Dollar strengthens, pressures oil prices * API says crude stocks fell, products stocks up * Coming up: EIA oil data, 10:30 a.m. EST Wednesday NEW YORK, Dec 8 (Reuters) - U.S. crude oil futures prices edged lower on Wednesday as the stronger dollar and an industry report of rising U.S. refined products stockpiles helped pressure crude futures ahead of government oil inventory data set for release later in the day. The dollar rose on Wednesday on a spike in U.S. Treasury yields after a proposed extension of tax cuts raised growth expectations for the U.S. economy. [USD/] Traders took their cue to buy the dollar from a rise in the 10-year U.S. Treasury yield to 3.25 percent US10YT=RR, a level not seen since late June. [US/] Yields on German government bonds, normally seen as a safe haven by investors, rose on Wednesday as deepening uncertainty over how to stem the euro zone's debt crisis hit even Europe's strongest economy. [ID:nLDE6B70R1] The American Petroleum Institute industry group said late Tuesday that U.S. crude oil stocks fell 7.3 million barrels in the week to Dec. 3, much more than expected and despite rising crude oil imports as refiners ramped up utilization and refined products stockpiles rose. [ID:nEAP104700] The API said gasoline stocks rose 4.8 million barrels and distillate stocks rose 1.7 million barrels. Crude oil stocks were expected to be down 1.3 million barrels, distillates by 500,000 barrels and gasoline stocks up only 500,000 barrels, a Reuters analyst survey ahead of the API report showed. [ID:nN07284894] The U.S. Energy Information administration will release the government's inventory report Wednesday at 10:30 a.m. EST (1530 GMT). FUNDAMENTALS * On the New York Mercantile Exchange, January crude CLF1 fell 45 cents, or 0.5 percent, to $88.24 a barrel at 8:35 a.m. EST, trading from $87.61 to $88.68. * India will soon take a decision on raising diesel prices, Oil Secretary S. Sundareshan said on Wednesday. [ID:nSGE6B706T] * ConocoPhillips (COP.N) said it shut a unit at its 239,400 barrels-per-day refinery in Lake Charles, Louisiana, to repair a leaking pipe. The filing did not specify the unit shut. [ID:nWNAB7403] * The U.S. Northeast will remain cold. Afternoon highs will be in the 20s west of the Appalachians and in the 30s east of the mountain range. Snow showers were predicted for northern New England. [ID:nN1313] * Enbridge Inc (ENB.TO) has been forced temporarily to disrupt oil flows on pipelines that feed crude onto its main system as restrictions on its U.S. network back volumes up in western Canada, a spokeswoman said on Tuesday. [ID:nN0799975] MARKETS NEWS * World stocks and U.S. government bonds suffered their worst sell-off in 18 months in the wake of a U.S. tax deal that highlighted Washington's expansionary fiscal stance. The dollar rose. [MKTS/GLOB] [FRX/] * Gold slipped below $1,400 an ounce in the face of an advancing dollar. [GOL/] UPCOMING DATA/EVENTS * No major U.S. economic data slated. * U.S. Energy Information Administration oil inventory data at 10:30 a.m. EST (1530 GMT) on Wednesday. * OPEC oil ministers meet Dec. 11 in Ecuador. 8:35 LAST NET PCT LOW HIGH CURRENT DAY AGO CHNG CHNG VOL VOL CLc1 88.24 -0.45 -0.5% 87.61 88.68 51,325 293,836 CLc2 88.74 -0.48 -0.5% 88.14 89.19 18,189 118,234 LCOc1 91.05 -0.34 -0.4% 90.27 91.29 52,546 202,011 RBc1 2.3023 -0.0207 -0.9% 2.2914 2.3150 3,117 46,839 RBc2 2.3054 -0.0160 -0.7% 2.2920 2.3124 2,467 23,757 HOc1 2.4618 -0.0084 -0.3% 2.4479 2.4685 3,733 53,700 HOc2 2.4808 -0.0078 -0.3% 2.4663 2.4852 1,544 24,951 * NYMEX crude oil for January CLc1 fell 45 cents to $88.24 a barrel by 8:35 a.m. in volume of 51,325 lots. (Reporting by Robert Gibbons; Editing by John Picinich)

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