* Iraq oil exports rise 8 percent in May
* China official PMI hits five-month high in May
* TransCanada says working on Keystone Gulf Coast crude
(Adds Keystone pipeline news, updates prices to settlement)
By Robert Gibbons
NEW YORK, June 2 Brent and U.S. crude oil
futures fell in choppy trading on Monday, weighed on by a
stronger dollar and recent data showing rising OPEC oil
Brent July crude fell 58 cents to settle at $108.83
a barrel, after hitting $109.87 and then pulling back below
Brent's 200-day moving average at $109.07.
U.S. July crude, also known by its West Texas
Intermediate benchmark, fell 24 cents to settle at $102.47 a
barrel, ending lower after touching $103.35 intraday.
The market earlier shrugged off a report from industry
intelligence company Genscape that TransCanada Corp's
Keystone Gulf Coast crude oil pipeline was shut and later news
that TransCanada said it was conducting maintenance on the
pipeline until Wednesday.
"Crude futures are seesawing and seem to be trying to find
the next driver, while reports of rising exports from (OPEC
members) Iraq and Iran and the ongoing strong U.S. production
are weighing on the market," said Gene McGillian, analyst at
Tradition Energy in Stamford, Connecticut.
Iraq's oil exports rose by 8 percent in May, and a terminal
was inaugurated that will expand shipping capacity by 800,000
barrels per day, the Oil Ministry said on Sunday.
OPEC's oil output last month rose to a three-month high, a
Reuters survey found on Friday, as increased supplies from
Angola and a rise in exports from southern Iraq outweighed
problems in Libya.
The dollar rose against the euro on Monday as subdued
inflation readings in Germany and slower than expected
manufacturing growth in the euro zone put pressure on the
European Central Bank to ease monetary policy.
A stronger dollar tends to put pressure on commodities
including oil, which are priced in the U.S. currency as it makes
them more expensive for non-U.S. importers.
Brent is seen likely to fall toward $108.43 after breaking
through a support level at $109.41 a barrel, while U.S. crude is
expected to end its rebound and drop to support at $102.30,
according to Reuters technical analyst Wang Tao.
CHINA DATA SUPPORTIVE
Brent and U.S. crude rose in early trading after data
showing that China's factory activity expanded in May at its
quickest pace in five months.
China's official Purchasing Managers' Index rose to 50.8 in
May from April's 50.4, the National Bureau of Statistics said on
Sunday, beating market expectations for 50.6.
"Anything over 50 is good news and is supportive of prices,
but this ... is not a bolt from the blue so, to some extent is
priced in," said Gareth Lewis-Davies, senior energy analyst at
(Additional reporting by Lin Noueihed in London and Manash
Goswami in Singapore; Editing by G Crosse, Dale Hudson, Jane
Baird and Peter Galloway)