NYMEX-U.S. oil rises on falling inventory, China fiscal pledges

Wed Jan 1, 2014 8:07pm EST

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SINGAPORE Jan 2 (Reuters) - U.S. oil futures nudged higher on Thurday, recovering some losses from earlier in the week after a higher-than-expected drop in U.S. crude inventories despite signs the Chinese economy lost some steam late last year.

FUNDAMENTALS

* U.S. crude futures for February delivery had risen 28 cents to $98.70 a barrel by 0100 GMT from Tuesday's close. Markets were shut on Wednesday for the New Year holidays.

* Brent crude for February delivery climbed to $111 a barrel on Thursday, up 20 cents from $110.80 a barrel on Tuesday.

* U.S. crude stocks fell by 5.7 million barrels to 361.8 million barrels in the week ending Dec. 27, against analysts' expectations of a 3 million barrel decline, data from the American Petroleum Institute showed on Tuesday.

* Iran and six world powers will implement an agreement in late January obliging Tehran to suspend its most sensitive nuclear work, an Iranian official was quoted as saying on Tuesday.

* Chinese state controlled oil trader, Zhuhai Zhenrong Corp, is negotiating a new light crude contract with Iran that could raise imports from Tehran to levels not seen since tough Western sanctions were imposed in 2012.

* Iraq exported an average of 2.341 million barrels per day in December, down from 2.381 million bpd in November, the country's oil ministry said on Wednesday.

MARKETS NEWS

* Asian markets got the new year off to a sluggish start as Chinese economic data disappointed ahead of a raft of reports on global manufacturing due out today.

* China's official Purchasing Managers' Index (PMI), which indicates whether business activity is expanding or contracting, fell to 51.0 in December from 51.4 the previous month and below forecasts of 51.2.

DATA/EVENTS

* The following data is expected on Thursday:

- 0145 GMT China HSBC manufacturing PMI final

- 0843 GMT Italy Markit/ADACI manufacturing monthly PMI

- 0853 GMT Germany Markit/BME manufacturing monthly PMI

- 0858 GMT Euro Zone Markit manufacturing monthly PMI

- 1500 GMT U.S. ISM manufacturing monthly PMI

- 1500 GMT U.S. construction spending mm

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