* Market probe talk could trigger risk aversion -traders
* Technicals: Brent, WTI outlooks diverge []
* Coming Up: U.S. EIA oil inventories, demand; 1500 GMT
(Adds Brent premium to WTI, EIA inventory report timings)
By Alejandro Barbajosa
SINGAPORE, Sept 9 (Reuters) - Oil pared gains on Thursday
to stay below $75 as Chinese commodity futures tumbled in a
widespread sell-off.
Market participants said the slide in China was linked to a
government investigation of speculative funds in the Shanghai
rubber market <0#SNR:>, which precipitated a decline across the
board from zinc to soyoil to cotton. []
"If it's severe enough, then you'll get concern in the
general market and this might become a risk aversion play, into
the dollar and commodities," said Jonathan Barratt, managing
director at Commodity Broking Services in Sydney.
U.S. crude for October <CLc1> added 6 cents to $74.73 a
barrel at 0400 GMT, after rising as much as 60 cents to $75.27,
approaching this week's high of $75.39 reached on Wednesday.
ICE Brent crude <LCOc1> gained 6 cents to $78.23.
Oil's early gains came on the back of an industry report on
Wednesday showing U.S. crude stockpiles unexpectedly plunged
last week, while easing concerns about the health of European
banks reassured investors about bets on commodities.
"There are tentative signs of improving demand from what we
saw last week," said Stefan Graber, a commodities analyst with
Credit Suisse in Singapore. "That could suggest demand
conditions are firming indeed."
U.S. crude stocks tumbled 7.3 million barrels last week,
the American Petroleum Institute reported, versus analysts
expectations for a 900,000-barrel gain. The drop came after
imports fell sharply to 8.863 million barrels per day (bpd)
from 9.209 million bpd in the previous week. []
U.S. gasoline stocks rose by 654,000 barrels, compared with
forecasts for a 900,000-barrel drop last week, the API said.
Distillates including heating oil and diesel rose 1.3 million
barrels, versus predictions for a 600,000-barrel rise.
Government statistics on inventories will follow on
Thursday at 1500 GMT from the U.S. Department of Energy's (DOE)
Energy Information Administration. The API and EIA reports were
delayed by one day this week because of the U.S. Labor Day
holiday on Monday.
"If the API drop is confirmed also by the DOE numbers, this
would have a positive impact on sentiment for the rest of
week," Graber said.
WTI DISLOCATION
Total U.S. petroleum stockpiles were at their highest level
since weekly records began in 1990 in the week to Aug. 27.
And crude stocks at the land-locked benchmark pricing point
in Cushing, Oklahoma, have remained high, depressing the value
of U.S. crude relative to European Brent, which was trading
about $3.45 higher than U.S. benchmark West Texas Intermediate
(WTI) on Thursday, near its widest since mid-May.
The appearance of such an unusually wide spread is known as
WTI dislocation, a market condition in which the U.S. benchmark
becomes disconnected from seabourne oil markets, where prices
are largely determined by global fundamentals.
Summer maintenance at North Sea fields and a strong Urals
crude market have this time also contributed to Brent's
widening premium to WTI.
For a graphic on Brent's premium over WTI:
http://graphics.thomsonreuters.com/AS/0810/ABE_20100809105935.j
pg "The fundamentals are not that lacklustre, (the surplus)
is more regionally focused in the U.S.," Graber said.
"On a global scale, the demand picture looks relatively
firm. This is the reason for the renewed dislocation between
Brent and WTI prices."
The U.S. government on Wednesday raised its forecast for
growth in world oil demand this year for the third month in a
row, mainly due to thirst for fuel in China, the Middle East
and Brazil. []
In its latest monthly report, the Energy Information
Administration boosted its forecast of growth in 2010 world oil
consumption by 50,000 barrels per day from its prior estimate,
projecting a rise of 1.62 million bpd to 85.95 million bpd.
Japan's Nikkei average rose 0.8 percent on Thursday, lifted
by short-covering after successful bond auctions in Portugal
and Poland helped ease worries about Europe's debt problems and
pushed up U.S. and European stocks a day earlier. []
The U.S. National Hurricane Center was monitoring newly
formed Tropical Storm Igor in the far eastern Atlantic Ocean
and three other weather systems in the basin late on Wednesday.
[]
Igor was bringing "squally" weather to the Cape Verde
Islands. Early computer models showed the system strengthening
into a hurricane in about three days as it moved west to
northwest in the open Atlantic in a track that would take it
over warm waters over several days, boosting its energy.
But so far none of the three systems showed any early signs
of entering the oil-rich Gulf of Mexico or disrupting offshore
production.
China's National Bureau of Statistics will release its
monthly suite of economic data including industrial production,
consumer and producer prices and retail sales on Saturday,
Sept. 11, at 0200 GMT, an official at the agency said.
[]
(Editing by Manash Goswami)
