* U.S. crude inventories down, fuel stockpiles rise - EIA
* OPEC oil output rises in July from June - Reuters survey
* U.S. economy rebounds sharply in Q2
By Florence Tan and Theodora D'cruz
SINGAPORE, July 31 Brent crude slipped towards
$106 a barrel on Thursday and was set to post its biggest
monthly loss in more than a year as higher OPEC output and
disappointing demand in the United States outweighed tensions in
the Middle East and Africa.
Gasoline stockpiles rose in the United States even though it
is the peak driving season, raising concern over the outlook for
demand in the world's largest oil consumer.
OPEC pumped more oil in July than in June despite concerns
that unrest in Africa and the Middle East could hurt production,
a Reuters survey showed.
Brent crude has fallen more than 5 percent this month and is
on track to post its biggest monthly loss since April 2013. On
Thursday the September contract had fallen 26 cents to $106.25 a
barrel by 0335 GMT.
U.S. crude futures for September delivery dropped 69
cents to $99.58 a barrel, putting the contract on course for a
5.6 percent fall on the month, the biggest since October.
The contract hit a two-week low of $99.16 earlier in the day
after data from the Energy Information Administration (EIA)
showed that gasoline and distillates stockpiles rose despite a
bigger-than-expected drop for crude.
"We've got quite a build in gasoline inventories and demand
figures have been disappointing," Ric Spooner, chief analyst at
CMC Markets in Sydney, said.
Crude supply from the United States is also increasing as
exports reached 288,000 barrels per day in May, the highest
since April 1999, according to EIA data.
The strength of the U.S. dollar in the past week has also
weighed on dollar-denominated oil, Spooner said.
The dollar held just below a 10-month peak against a basket
of major currencies on Thursday after soaring on strong U.S.
economic growth data. A stronger greenback raises the cost of
investing in oil for holders of other currencies.
Oil prices have eased after hitting multi-month highs in
June because of geopolitical tension in parts of the Middle
East, Africa and Europe.
"Over the course of the last few weeks, the market had been
prepared to unwind the risk premium that had built into markets
for potential supply disruption in Iraq and Russia," Spooner
Still, investors are watching how sanctions on Russia over
Ukraine will affect its oil exports.
"Now that both the EU and the U.S. have stepped up measures
to prevent some Russian companies from accessing the capital
markets, this could perhaps mean disappointing oil exports from
Russia," said Gordon Kwan, head of Asia oil and gas research at
Nomura in Hong Kong.
"That, together with the Gaza tensions, could be a good
support for Brent prices."
(Editing by Alan Raybould)