* U.S. manufacturing sector grows faster than expected
* Crude stocks rise; gasoline, distillates fall - EIA
* Chinese manufacturing PMI rises for 18th straight month
(Updates after U.S. manufacturing, oil inventory data)
By Christopher Johnson
LONDON, Sept 1 (Reuters) - Oil rose more than 3 percent to
above $74 a barrel on Wednesday after strong U.S. and Chinese
data soothed investor concerns over the pace of economic
recovery in the world's top two energy consumers.
U.S. government inventory data on Wednesday showed a drop in
gasoline and distillate stocks, helping to support oil price
gains. The numbers did show a jump in crude inventories but the
rise was less severe than industry data had suggested on
Tuesday.
Benchmark U.S. crude oil futures <CLc1> for October gained
$2.18 to $74.10 by 1516 GMT. On Tuesday, the contract touched
$71.53, the lowest intraday price since Aug. 25.
London ICE Brent crude futures <LCOc1> rose $1.83 to $76.47.
U.S. crude stocks rose 3.43 million barrels in the week to
Aug. 27 as refineries cut their utilization rates, according to
a weekly report from the Energy Information Administration.
However, distillate stocks fell 739,000 barrels, while
stocks of gasoline fell 212,000 million barrels. []
Oil was recovering some of the 3.7 percent losses made on
Tuesday when a separate industry inventory data from the
American Petroleum Institute (API) said U.S. crude stockpiles
jumped 4.8 million barrels last week.
"The EIA's crude stock build is bearish but the market is
ignoring it because earlier today, it found support from data
showing new signs of growth in China, which means better oil
demand going forward," said Mark Waggoner, president at U.S.
based Excel Futures.
US, CHINA GROWTH
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. []
The U.S. manufacturing sector also grew faster than expected
in August, chalking up a 13th straight month of expansion,
helping to calm fears that economic growth was stagnating in the
world's largest fuel user. []
The dollar fell nearly 1 percent against a basket of
currencies, aiding oil's rise. A weaker dollar often supports
commodities because many of them are priced in the U.S.
currency. [] <.DXY>
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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 the peak for this year at $87.15 on May 3.
Reuters monthly survey of production by the Organization of
the Petroleum Exporting Countries was supportive for oil prices,
showing output fell in August to the lowest since November 2009
thanks partly to declines in Nigeria. []
(Additional reporting by Joe Brock; editing by Alison Birrane
and Keiron Henderson)
