* China's economy picks up speed, Q2 GDP growth 7.9 pct y/y
* U.S. crude stocks down, gasoline up in July 4 week
(Updates prices, adds details, changes dateline PVS Perth)
By David Sheppard
LONDON, July 16 (Reuters) - Oil slipped below $61 a barrel
on Thursday after gaining more than 3 percent in the previous
session, as investors remained cautious about the pace of
economic recovery despite strong growth numbers from China.
While better-than-expected gross domestic product (GDP)
growth from China, the world's second largest energy consumer,
has supported crude prices, analysts said persistent worries
about underlying weak energy demand was keeping prices in check.
[]
U.S. oil for August delivery <CLc1> eased 61 cents to $60.93
a barrel by 0912 GMT, after gaining 3.4 percent on Wednesday.
London Brent crude slipped 66 cents to $62.43 ahead of the
August contract's expiry later on Thursday.
"There's no doubt that the Chinese GDP numbers are positive
and would provide an underlying support for crude," said Victor
Shum, a Singapore-based analyst at Purvin & Gertz.
"But sentiment is still cautious and investors are also
somewhat sceptical of an economic recovery anytime soon,
particularly in the U.S. where unemployment is still very high."
China's growth rate jumped in the second quarter to 7.9
percent from 6.1 percent due to a surge in state spending and
bank lending. China is the best-performing major economy in the
world. []
Asian shares powered to a one-month high on the news, but
the reaction in Europe was muted as the depth of the economic
downturn in the region has left many investors wary. []
Also highlighting the ongoing problems facing the world
economy is the looming bankruptcy of CIT Group Inc <CIT.N>, a
lender to hundreds of thousands of small and mid-sized U.S.
businesses, after bailout talks with the U.S. government fell
apart. []
OIL STOCKS
Oil's large gains on Wednesday came after the U.S. Energy
Information Administration (EIA) said commercial crude oil
stocks fell 2.8 million barrels last week, against market
expectations of a 1.6 million barrel fall. []
The drop in crude stocks overshadowed a larger-than-expected
rise in U.S. gasoline supplies over the Fourth of July
Independence Day holiday weekend -- the traditional peak of the
U.S. summer driving season.
A rally in the equities markets, along with a weak U.S.
dollar, which traded near a one-month low against major
currencies, also supported oil prices. []
"The prices are pulling back after the rally yesterday and
ahead of the expiry of the Brent contract," VTB Capital analyst
Andrey Kryuchenkov said.
"The move up in equities was supportive but we're likely to
see a pullback today as the EIA fuel stocks data was so mixed.
The jobless claims figures later today are the next event, as
oil is tracking risk sentiment and equities at the moment."
Investors will be keenly watching the U.S. jobless claims
data due to be released at 1230 GMT on Thursday. U.S. energy
demand has fallen sharply during the recession due to high
unemployment and lower industrial production.
Oil prices have lost almost 15 percent since peaking above
$73 a barrel at the end of June. Prices hit a near two-month low
of around $58 a barrel earlier this week.
(Additional reporting by Fayen Wong in Perth; Editing by Jon
Boyle)
