UPDATE 10-Oil falls on US crude stocks rise, Europe's weak data

Wed Oct 24, 2012 5:05pm EDT

Related Topics

* U.S. crude settlement lowest since early July
    * U.S. crude stocks rose more than expected last week - EIA
    * China HSBC flash PMI improves, euro zone data poor
    * Coming Up: U.S. jobless claims 8:30 p.m. EDT Thursday

 (Adds detail, paragraphs 9-10, 12)
    By Robert Gibbons
    NEW YORK, Oct 24 (Reuters) - Brent crude prices fell for a
seventh consecutive session on Wednesday as rising U.S. crude
inventories and weak euro zone economic data offset supportive
signs that Chinese petroleum demand could stage a recovery.
    Crude oil stocks in the United States jumped 5.9 million
barrels last week, the U.S. Energy Information Administration
said in a weekly report, well above the increase of 1.9 million
barrels in a Reuters survey of analysts. 
    Gasoline stocks rose more than expected, total distillate
stockpiles eased slightly less than the consensus forecast and
demand for the products over the previous four weeks was below
the year-ago period.
    "The report is mostly bearish, with the large increase in
crude oil inventories being the highlight of the report," said
John Kilduff, partner at Again Capital LLC in New York.
    Oil prices pushed higher earlier on lift when a survey of
purchasing managers showed China's economy is slowly picking up
from its weakest period of growth in three years.
 
    But while the HSBC Flash Manufacturing Purchasing Managers
Index (PMI) hitting a three-month high of 49.1 in October was
supportive for oil prices, the reading was still below the
50-point mark that separates expanding from shrinking business
activity.
    Brent December crude slipped 40 cents to settle at
$107.85 a barrel, recovering to close back above the 100-day
moving average of $107.50. Wednesday's $106.80 low was the
lowest for front-month Brent since Sept. 20.
    The last time Brent fell seven straight sessions was in July
2010. Front-month Brent has lost $7.95, or 6.8 percent, since
its last higher settlement, at $115.80 a barrel, on Oct. 15.
    Brent received support from news that Nigeria is expected to
export less crude in December than projected November loadings.
 
    Maintenance-related curbs to North Sea production and
potential threat to supply from the violence in the Middle East
and Iran's ongoing dispute with Israel and the West over
Tehran's nuclear program also have been supportive to crude
prices.    
    Down for a fifth straight session, U.S. crude fell 94
cents to settle at $85.73 a barrel, lowest settlement since
July, after falling to $84.94.
    Brent's premium to U.S. crude CL-LCO1=R increased to
$22.12 a barrel based on settlements, recovering after falling
to $19.08 during Monday's session.
    The rise in U.S. gasoline inventories helped send U.S. RBOB
gasoline futures to a tenth straight lower close, though
they were off only 0.20 cent to settle at $2.6030 a gallon.
    U.S. heating oil slipped a ninth straight session,
dipping 0.40 cent to $3.0394 a gallon, recovering after slipping
below the 200-day moving average of $3.0276 during the session.
    
    WEAK DATA FROM EUROPE
    Poor economic data from Europe pulled oil prices off early
peaks ahead of the U.S. oil inventory report. 
    Markit's Composite Purchasing Managers' Index, which polls
around 5,000 businesses across the 17-nation bloc and is viewed
as a reliable growth indicator, fell to 45.8 this month, the
lowest reading since June 2009. [ID: nL5E8LO4JB] 
    Manufacturing PMI in Germany, Europe's largest economy, fell
unexpectedly and business sentiment dropped for the sixth
consecutive month to its lowest in more than 2-1/2 years.
    "Not only do these data points support the slowing economic
scenario, but the PMI manufacturing index is an energy-sensitive
index and directly translates to slower energy demand," said
Dominick Chirichella of New York's Energy Management Institute.
    
    FED STICKS TO ITS PLAN
    The U.S. Federal Reserve on Wednesday stuck to its plan to
keep stimulating U.S. growth until the job market improves even
as it acknowledged some parts of the economy were looking a bit
better. 
    Weak European data muted the reaction to U.S. data showing
that new home sales increased 5.7 percent to the fastest pace
since April 2010, when sales were boosted by a tax credit for
first-time home buyers. 

 (Additional reporting by Simon Falush and Alice Baghdjian in
London and Manash Goswami and Florence Tan in Singapore; Editing
by Marguerita Choy)
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