* Crude at Cushing, Oklahoma down 9.8 mln bbls in 5 weeks
* North Sea restart, Iran comments ease supply concern
* Federal Reserve stimulus decision weighs on commodities
(Updates with settlement prices, adds quote)
By Nicolas Medina Mora Perez
NEW YORK, Aug 7 Oil slid for a fourth straight
session on Wednesday, driven lower by an expected increase in
North Sea crude output next month and by worries about how soon
the Federal Reserve will end its U.S. economic stimulus.
Fed officials hinted the U.S. central bank may begin to
taper its bond-buying programs in September, feeding worry about
the outlook for oil demand. This offset supportive news of
supply disruptions in Libya and a big inventory draw last week
at the delivery point for benchmark U.S. crude oil futures.
"The market is choppy, it looks like we are still trying to
consolidate between $103 and $108 a barrel after last month's
rally" said Gene McGillian, an analyst with Tradition Energy in
Brent crude fell 74 cents to settle at $107.44 a
barrel, after falling by more than $1 per barrel to a low of
$107.07 earlier in the session. Prices rose from around $100 a
barrel at the start of July to a four-month peak above $110 on
U.S. oil also fell for the fourth consecutive
session, losing 93 cents to settle at $104.37 a barrel, after
hitting intraday lows of $104.16.
Brent's premium to U.S. oil widened 19 cents to settle at
$3.07 a barrel, having touched intraday highs of $3.27 and lows
Gasoline futures fell 4 cents to settle at $2.87 a
gallon, taking losses since July 19 to almost 30 cents.
Oil prices were pressured by growing supplies of Brent crude
and by hopes that a new Iranian administration may be willing to
enter negotiations with the West over Tehran's nuclear program.
Shutdowns in key Libyan oilfields did provide some support.
Output of Libya's main crude oil grade, Es Sider, has been
completely shut down since Tuesday, along with the fields
producing grades Amna and Sirtica, following strikes at the Es
Sider and Ras Lanuf terminals, Libyan and trading sources said.
The outage in Libya is one of the worst disruptions the OPEC
member has seen in the last year, with exports down to about
425,000 barrels per day (bpd) from previous levels of more than
1 million bpd.
Elsewhere in the world, traders said planned maintenance in
a key pipeline will support Brent crude throughout August.
Still, the supply of North Sea crude oil that underpins the
international benchmark will rise by almost 11 percent in
September, weighing on prices.
The market was watching new Iranian president Hassan Rouhani
a day after he said he was ready to enter "serious and
substantive" negotiations over the country's disputed nuclear
program. Western sanctions have cut Iranian exports by about 1
million barrels per day.
"It is a fair bet that progress on the nuclear issue will be
made with gestures on sanctions, small at first but probably
growing larger," said David Hufton of oil brokers PVM in London.
"It is the oil industry's version of tapering."
EIA REPORTS SMALLER THAN EXPECTED DRAWS
U.S. crude oil inventories declined by 1.32 million barrels
last week, the U.S. Energy Information Administration said on
Wednesday, largely in line with the 1.2-million-barrel reduction
analysts forecast prior to the data.
The decline was smaller than the 3.66-million-barrel drop
reported on Tuesday by industry group the American Petroleum
Institute. The EIA also reported a small rise in gasoline
stocks, in contrast to expected declines.
"We're going to call this report sharply neutral, said Phil
Flynn, an analyst with Price Futures Group in Chicago.
"The expectations were right on, which shows the trade has a
real good handle on supply and demand right now.
Crude stockpiles at Cushing, Oklahoma, the delivery point
for U.S. oil, dropped by 2.2 million barrels to reach their
lowest since March 2012.
Over the last five weeks, as pipeline bottlenecks have
become unblocked and refineries have run at high rates for the
summer driving season, the total stock draw at the delivery hub
has been 9.8 million barrels.
(Additional reporting by Anna Sussman in New York, Alex Lawler
in London and Manash Goswami in Singapore; Editing by James
Jukwey, Keiron Henderson, David Gregorio and James Dalgleish)