* China's PMI manufacturing shows 18th month of growth
* Oil fell 9 pct in August as U.S. outlook deteriorated
* Coming Up: U.S. EIA oil inventory report; 1430 GMT
By Alejandro Barbajosa
SINGAPORE, Sept 1 (Reuters) - Oil rebounded half a percent
to top $72 on Wednesday after China's manufacturing industry
accelerated last month, easing investors' concern about the
faltering pace of global economic recovery.
Prices tumbled 3.7 percent on Tuesday on signs U.S. that
stockpiles rose further last week and bad weather was set to
suppress gasoline demand at the end of the driving season.
Appetite for raw materials was also depressed in the
previous session after minutes from the U.S. Federal Reserve's
latest meeting showed policymakers saw increasing risks to
growth, contributing to the cautious mood, and a regional index
of business activity rose less than expected. []
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U.S. crude for October <CLc1> rose as much as 0.4 percent
to $72.21 a barrel and was up 26 cents at $72.18 by 0221 GMT,
while ICE Brent <LCOc1> climbed 27 cents to $74.91.
China's purchasing managers' index (PMI) rose to 51.7 in
August from 51.2 in July, official data showed on Wednesday,
marking the 18th straight month it has stood above the
threshold of 50 separating expansion from contraction in the
world's second-largest oil user. []
"Commodity markets generally seem to have been worrying
less about China and more focused in the United States
recently, but China is obviously very important," said Ben
Westmore, a commodities analyst at National Australia Bank.
"The underlying strength in that economy is still sound,
such that commodity demand and demand for oil will continue to
be strong in the next couple of years."
Markets also awaited manufacturing PMI data from the euro
zone and the United States later on Wednesday.
Oil fell more than $7 and almost 9 percent in August, its
biggest monthly percentage loss since May, as the outlook for
the U.S. economy deteriorated. Prices hit a 2010 low of $64.24
on May 20, the weakest front-month price since July 2009, after
reaching a 2010 peak of $87.15 on May 3.
CRUDE INVENTORIES JUMP
U.S. crude stockpiles jumped 4.8 million barrels last week,
the industry-funded American Petroleum Institute (API) said on
Tuesday, more than four times an expected gain of 1.1 million
barrels.
Drops in fuel stockpiles were smaller than the crude
increase, at 589,000 barrels for gasoline and 1.9 million
barrels for distillates including heating oil and diesel,
according to the API.
The Energy Information Administration will publish
government statistics on inventories and demand on Wednesday at
1430 GMT. Expectations are for gasoline supplies to have
declined 200,000 barrels and distillates to have gained 1.2
million in the week to Aug. 27, a Reuters survey showed.
Next Monday's U.S. Labor Day holiday is the traditional end
of the summer driving season and MasterCard said U.S. weekly
retail gasoline demand fell 3.1 percent last week and managed a
rise of only 0.7 percent versus a year-ago. []
Hurricanes, now at the peak of the storm season, could
potentially could have a bigger negative effect on U.S.
gasoline consumption than on crude production and refining.
They have so far posed little threat to rigs and refineries on
the Gulf of Mexico coast.
Powerful Hurricane Earl churned toward the eastern U.S.
seaboard on Tuesday and looked to sideswipe the densely
populated coast from North Carolina to New England, the U.S.
National Hurricane Center said late on Monday.
Forecasters expected the main core of the Category 4
hurricane to stay offshore as Earl moved parallel to the coast
during the upcoming Labor Day holiday, disrupting holiday
plans.
The U.S. National Hurricane Center was monitoring two other
tropical systems in the Atlantic, but computer models showed no
immediate threat to Gulf of Mexico oil infrastructure.
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(Editing by Clarence Fernandez)
