* Chinese equity sell-off rattles global markets
* Awaiting EIA report to see if bullish API data confirmed
* Kuwait sees no change to OPEC targets at Sept meeting
(Updates prices, recasts)
By David Sheppard
LONDON, Aug
19 (Reuters) - Oil fell below $69 a barrel on Wednesday, at one
stage losing more than $1, 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. Now, with
investors' desire to take on more risk firmly linked to Chinese
growth, confidence has been shaken.
By 1242 GMT, U.S. crude for September delivery <CLc1> was
down 51 cents at $68.68 a barrel, off an earlier session low of
$68.05. London Brent crude for October <LCOc1> was down 67 cents
at $71.70.
"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. []
European shares tracked Chinese equities lower, while U.S.
futures pointed to a lower open.
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 U.S. Energy Information Administration
(EIA) data at 1430 GMT will be closely watched to see if it
confirms the API's bullish figures, and will determine the
market's trading tone for the rest of the week. []
"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," said Tony Nunan, risk manager at Tokyo-based
Mitsubishi Corp.
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
into a major Category 4 storm on Wednesday, as it moved closer
to 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.
(Additional reporting Emma Farge in London and by Jennifer Tan
in Singapore; Editing by Anthony Barker)
