* EIA data due later may confirm API data showing crude
build
* Rise in China's implied oil demand for 3rd mth offers
boost
* Dollar, equity markets could provide added support
(Updates with prices, China, Nigeria)
By Jennifer Tan
SINGAPORE, July 22 (Reuters) - Oil slid to just above $65 a
barrel on Wednesday, after data showing an unexpected rise in
U.S. crude stocks underscored worries about persistently weak
demand from the world's top energy consumer.
The release of more closely watched U.S. Energy Information
Administration (EIA) data later in the day could confirm the
American Petroluem Institute's (API) bearish figures, and will
set the trading tone for the market.
"Sentiment has taken a knock from the API numbers, which
have primed expectations for the EIA data later tonight, so if
the EIA numbers show a similar trend, it's going to be pretty
negative for oil," said David Moore, a commodity strategist
with the Commonwealth Bank of Australia.
U.S. crude oil for September delivery fell 39 cents to
$65.22 a barrel by 0640 GMT, off an early low of $64.75. London
Brent crude for September fell 11 cents to $66.76.
U.S. crude oil stockpiles rose unexpectedly last week as
domestic refining activity slumped, the API said on Tuesday.
Commercial oil inventories jumped 3.1 million barrels to
349.883 million barrels, reversing a stretch of weekly declines
triggered by thin import levels and defying analyst
expectations for a 2.1-million barrel drop. []
The EIA will unveil its report at 1430 GMT.
However, data showing that apparent oil demand in the
world's second-largest energy user rose for the third month in
a row could help limit oil's losses.
China's implied oil demand in June rose 1.8 percent over a
year ago, Reuters calculations from official data showed on
Wednesday. []
Lending further price support were firm equity markets and
a weak dollar.
U.S. equities ended higher on Tuesday, as a slew of rosy
corporate earnings reports bolstered hopes for an economic
recovery that could revive global energy demand. []
Asian shares also inched up to a 10-month peak on
Wednesday, but gains were limited as investors locked in
profits in the belief that the run-up in prices had become
overstretched. []
The greenback was weighed down by Federal Reserve Chairman
Ben Bernanke's remarks in his testimony before the House
Financial Services Committee on Tuesday that the economy was
too weak for the central bank to tighten monetary policy any
time soon. []
"In the near term, we expect the U.S. dollar to come under
further pressure, as there will not be any rate hikes to push
it up, so there could be more upside for oil -- perhaps a rise
of another $2-$3 over the next week," said Peter McGuire,
Managing Director of Commodity Warrants Australia.
On the supply front, Royal Dutch Shell <RDSa.L> said on
Tuesday it had resumed oil output at its EA oilfield in
Nigeria, a rare bright spot for an industry reeling from a
string of militant attacks in the last two months.
[]
Militants have devastated the OPEC member's oil output and
has kept Nigeria from pumping above two-thirds of its installed
capacity, costing it billions of dollars in lost revenue.
(Editing by Clarence Fernandez)
