(Repeats, fixes garble in final paragraph)
* Crude stocks rise; gasoline, distillates fall - EIA
* U.S. manufacturing sector grows faster than expected
* Chinese manufacturing PMI rises for 18th straight month
(Recasts, updates prices, market activity, new byline, changes
dateline, previously LONDON)
By Gene Ramos
NEW YORK, Sept 1 (Reuters) - Oil rose more than 3 percent
on Wednesday, rebounding after two days of declines, as strong
manufacturing data from China and the United States revived
risk appetite and eased worries about flagging global oil
demand.
The U.S. and Chinese data helped the market rebound despite
a U.S. Energy Information Administration (EIA) report that
showed total U.S. petroleum stockpiles soaring to 1.143 billion
barrels, the highest inventory level since at least 1990, when
the government began issuing weekly stocks data.
"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 Excel
Futures in Bend, Oregon.
Benchmark U.S. crude oil futures for October <CLc1> gained
$1.99 to $73.91 a barrel by 12:50 p.m. EDT (1650 GMT).
London ICE Brent crude futures <LCOc1> rose $1.81 to
$76.45.
The rebound came after oil futures ended August down more
than $7, as inventories swelled and the demand outlook dimmed
with gloomy U.S. economic data. The decline of almost 9 percent
was the biggest monthly percentage decline since May.
China's purchasing managers' index (PMI) rose to 51.7 in
August from 51.2 in July, official data showed, the 18th
straight month it has stood above the level of 50 which
separates 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 data boosted investor confidence about the economy,
giving a lift to Wall Street [] and commodities.
The EIA data showed domestic crude stockpiles rose 3.4
million barrels in the week to Aug. 27, as refineries reduced
utilization rates. The gain was larger than analysts had
expected, but much lower than the 4.8 million barrel increase
reported by the industry group American Petroleum Institute on
Tuesday.
Distillate supplies fell 739,000 barrels, going against
forecasts for an increase, and gasoline inventories declined
212,000 barrels, slightly more than expected, the report from
the U.S. Energy Information Administration showed.
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For Reuters Insider coverage of EIA data, click:
http://link.reuters.com/pyc78n
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The large build in U.S. total crude stockpiles could deepen
the contango in crude markets, when front month futures trade
at a discount to later months, another sign of weak demand in
the giant U.S. market, according Christopher Henwood, a Reuters
commodities specialist. (http://link.reuters.com/qet58n )
The spread between the first and second month crude oil
contracts has been rising steadily since mid-August, pushing
out to $1.60 on Tuesday, the highest level since early June
when it touched $1.64.
The U.S. dollar fell against major currencies after the
upbeat manufacturing data calmed investors worried bout the
global economy, raising appetitte for riskier assets. []
Crude oil supply from the Organization of Petroleum
Exporting Countries fell in August to the lowest level since
Novemer 2009 as output from Nigeria, the United Arab Emirates
and Iraq declined, according to a Reuters monthly survey
released on Wednesday. []
Meanwhile, U.S. government storm trackers said that a newly
formed tropical depression in the eastern Atlantic Ocean would
strengthen into Tropical Storm Gaston during the next 48 hours.
But it was still too early to tell if the system would make its
way to the oil-rich Gulf of Mexico. []
Powerful Hurricane Earl and Tropical Storm Fiona were both
expected to march northerly in the Atlantic, of the U.S. East
Coast, computer models showed. (See:
http://link.reuters.com/san78n )
(Additional reporting by Robert Gibbons, David Shelppard and
Eileen Moustakis in New York; Christopher Johnson and Joe Brock
in London; Editing by David Gregorio)
