(Refiles to remove extraneous word in paragraph 4)
* Edgy over big crude build in U.S., Cushing near capacity
* China central bank comments ease pressure, but fears
remain
* U.S. regulators mulling tightening measures, investors
wary
(Updates prices, China shares)
By Ramthan Hussain
SINGAPORE, July 30 (Reuters) - Oil eased towards $63 a
barrel on Thursday, after sliding almost 6 percent the day
before on data showing a jump in U.S. crude stocks, while the
market kept an eye on measures by China to manage credit
growth.
Adding to uncertainties in the oil market was news the U.S.
Commodities Futures Trading Commission (CFTC) was considering
implementing position limits for some commodity futures in the
face of the wide price swings that have raised worries over
speculation.
Crude oil inventories in the world's top consumer jumped by
an unexpected 5.1 million barrels to 347.8 million barrels in
the week to July 24, data from the Energy Information
Administration (EIA) showed, as imports hit a six-month high
and refiners cut processing rates. []
U.S. crude <CLc1> shed 18 cents to $63.17 a barrel by 0626
GMT, after plunging 5.77 percent on Wednesday, the biggest
daily percentage drop since April 20. London Brent <LCOc1>
gained 17 cents to $66.70 a barrel.
"The fall is largely driven by the increase in U.S. crude
inventories," said Tetsu Emori, a fund manager at Tokyo-based
Astmax Co Ltd, who sees the next support level in the $58-60
range.
Distillate stocks rose to the highest level in nearly 25
years, while gasoline stockpiles fell, the EIA said. Over the
past four weeks, U.S. fuel consumption dropped 4.1 percent
against year-ago levels, led by a 10.7 percent drop in
distillates demand.
CHINA'S TIGHTENING A CONCERN
Barclays Capital analyst Yu Yingxi said inventories at
Cushing, Oklahoma, a large storage hub and delivery point for
U.S. crude futures, were close to operable capacity and if this
continued, it would trigger the same price volatility seen
earlier this year.
A glut at Cushing earlies this year prompted U.S. crude
futures to trade at exceptional discounts to Europe's Brent
crude <LCOc1>. West Texas Intermediate (WTI) crude for
September delivery was discounted by as much as $3.64 a barrel
to Brent on Thursday.
Yu also said any measures by China that could have an
impact on industrial growth and fuel demand would be closely
watched by oil markets.
"But the government will err on the side of caution. I
don't think the Chinese government will tighten up too much
and risk disrupting the economy which is just starting to show
signs of recovery," she said. "But sentiment will be affected."
Chinese shares suffered their deepest daily decline in
eight months on Wednesday on fears that Beijing may move to
tighten money supply and banks could begin to restrict lending.
However, China's central bank said on Thursday it will keep
a loose monetary policy to consolidate its economic recovery,
but Chinese financial shares dipped on nagging concerns Beijing
may move to stem lending.
Chinese stocks also continued to fall on persistent worries
this year's rally has outpaced earnings growth, while Hong Kong
shares slipped as energy stocks tracked falling crude prices.
The yen fell while the dollar held firm against the euro,
after the Chinese central bank's vice governor was reported as
saying it will use market tools instead of quota-style controls
to ensure credit growth is appropriate. []
BarCap's Yu said investors would also fret over any
tightening moves by U.S. regulators such as imposing position
limits on commodity futures, which could force them away from
trading WTI crude towards Brent, which could also explain the
widening spread between the two.
(Editing by Ben Tan)
