* Chinese equity sell-off rattles global markets
* EIA report due later may confirm bullish API data
* Kuwait sees no change to OPEC targets at Sept meeting
(Updates prices, recasts, previous Singapore)
By David Sheppard
LONDON, Aug 19 (Reuters) - Oil fell below $69 a barrel on
Wednesday after a near 5 percent slump in Chinese shares sent
doubts rippling through global markets about the strength of the
world economic recovery.
Prices had surged by more than 3 percent in the previous
session on tentative signs oil demand could be picking up in the
United States, the world's largest energy consumer, but with
investors' desire to take on more risk again firmly linked to
Chinese growth, confidence has been shaken.
By 0855 GMT, U.S. crude for September delivery <CLc1> was
down 28 cents at $68.91 a barrel, off an earlier session low of
$68.54. London Brent crude for October <LCOc1> was down 50 cents
at $71.89.
"The good news that has driven markets over much of the
summer has been emanating from China, they seemed to be leading
the return to global growth," said Paul Harris, head of natural
resources risk management at Bank of Ireland Global Markets.
"But this is going to be a patchy recovery as we emerge from
such a sharp global slowdown -- it's not going to be in a
straight line, even if this equity sell-off doesn't really
signal any fundamental changes to the outlook for oil."
Shanghai stocks <> tumbled to a two-month low and have
slumped by around 20 percent in just two weeks but remain up by
more than 50 percent so far this year. []
Oil prices had been supported by data released late on
Tuesday from the American Petroleum Institute (API) showing U.S.
crude oil stockpiles fell last week by 6.1 million barrels,
against forecasts for a 1.3 million barrel build. []
U.S. distillate stocks rose by 1.5 million barrels, more
than double what analysts had expected, while gasoline stocks
fell less than forecast.
The release of the more closely watched U.S. Energy
Information Administration (EIA) data later in the day could
confirm the American Petroleum Institute's (API) bullish
figures, and will determine the market's trading tone for the
rest of the week.
"What's keeping the market down is high U.S. inventories,
which is a proxy for demand," said Tony Nunan, risk manager at
Tokyo-based Mitsubishi Corp.
"If the EIA data confirms the API report, we could see the
market head higher. The $76 level will be a top for the market
in the medium term until we see further drawdowns in the
inventories," he added.
The EIA figures will be released at 1430 GMT.
WEATHER AND OPEC
Traders also watched for storms in the Atlantic Basin but
there was no immediate threat seen to U.S oil installations in
the Gulf of Mexico.
Hurricane Bill, the first of the 2009 Atlantic season, grew
quickly into a major Category 3 storm on Tuesday and could
strengthen as it curves north, likely missing the eastern United
States as it passes Bermuda. []
Kuwait sees no need for OPEC to change oil supply targets at
its meeting in September as the oil price is satisfactory, the
country's oil minister said on Wednesday. []
The Organization of the Petroleum Exporting Countries,
supplier of over a third of the world's oil, meets on Sept. 9 in
Vienna to discuss supply policy.
Oil prices have more than doubled so far in 2009, boosted in
part by OPEC's decision to cut supplies to the market.
(Reporting by David Sheppard; additional reporting by
Jennifer Tan in Singapore; Editing by William Hardy)
