* U.S. oil product stocks jump more than expected
* IEA lifts demand forecast, but emphasizes economic risk
* Coming up: U.S. weekly jobless claims, Thursday
(Recasts, updates prices, market activity; changes byline,
moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Aug 11 (Reuters) - Oil prices fell a second
straight day on Wednesday, weighed down by rising U.S. refined
products inventories and cautious economic outlooks that also
pressured equities markets.
Refined products inventories rose more than expected in the
week to Aug. 6 despite a sharp 3.1 percentage point drop in
refinery utilization, the U.S. Energy Information
Administration reported. []
Gasoline inventories rose 400,000 barrels, more than
expected, leaving the premium to year-ago levels at 11.5
million barrels. U.S. gasoline futures tumbled more than 3
percent, dipping briefly below $2 a gallon for the first time
since July 7.
U.S. crude for September <CLc1> delivery fell $1.90, or
2.37 percent, to $78.35 a barrel at 1:31 p.m. EDT (1731 GMT),
having traded from $77.90 to $80.40.
September RBOB gasoline <RBc1> fell 7.78 cents, or 3.73
percent, to $2.0075 a gallon, trading as low as $1.9942.
Front-month ICE Brent crude <LCOc1> fell $1.74 to $77.86 a
barrel.
"One thing to take from the report was the
larger-than-expected gain in products despite lower refinery
rates, which shows how poor demand is in the United States,"
said Mike Zarembski of OptionsExpress in Chicago.
The EIA also reported a 3.5 million barrel increase in
distillate stocks. This more than overshadowed the potentially
bullish news of a 3 million barrel fall in crude inventories.
Oil already was under pressure after Tuesday's downbeat
economic outlook from the Federal Reserve, Wednesday's cautious
take on the economy from the International Energy Agency and
reports showing slower economic growth and slipping Chinese oil
demand growth.
The IEA monthly report slightly increased its forecasts for
global crude demand for 2010 and 2011, but warned any rise in
fuel consumption could be wiped out if the global economy
proved weaker than expected, []
The dollar rallied against most currencies, while falling
to a 15-year low against the yen, as the gloomy outlook from
the Federal Reserve and slower Chinese factory growth dented
risk appetite. []
CHINA GROWTH SLOWS
Growth in Chinese investment and factory output slowed
further in July as the government slowed credit growth after a
record lending spree in 2009. []
While China's implied oil demand rose a modest 2.2 percent
in July from year ago, it fell 6 percent from June.
[]
On a more hopeful note, China's apparent crude oil demand
should rise 11 percent this year, state media reported, citing
a China Petroleum and Chemical Industry Federation forecast.
[]
STORM WATCH
The market did not receive any support from Tropical
Depression Five in the eastern Gulf of Mexico. It was expected
to hit eastern Louisiana as a tropical storm Thursday night,
the U.S. National Hurricane Center said. []
As of Wednesday, there had been no reports of oil or
natural gas output cuts or full platform evacuations in the
Gulf of Mexico due to the tropical weather threat, according to
the U.S. Bureau of Ocean Energy Management. []
(Additional reporting by David Turner and Florence Tan)
