* U.S. Jan oil demand down 2 pct from year earlier
* China's 2010 oil demand growth to exceed 5 pct -CNPC
* Floating storage inventories drop in January -Goldman
(Updates prices)
By Alejandro Barbajosa
SINGAPORE, Feb 4 (Reuters) - Oil fell a few cents on
Thursday to trade below $77 as rising crude inventories in the
United States signalled that a rebound in U.S. economic
activity was failing to translate into higher demand.
U.S. crude for March delivery declined 17 cents to $76.81 a
barrel at 0736 GMT, while London ICE Brent shed 21 cents to
$75.71. Prices are now around 48 percent below their July 2008
peak of more than $147.
A government report Wednesday showed U.S. crude stockpiles
rose more than expected as imports gained and refineries kept
operating at unusually low rates.
Although manufacturing has shown a strong rebound, U.S.
demand for distillate fuel, including diesel, plunged more than
9 percent in the four weeks to Jan. 29 from a year earlier,
according to the Energy Information Administration (EIA), part
of the Department of Energy (DOE).
"Yesterday's DOE data was a disappointment," said Serene
Lim, an ANZ oil analyst based in Singapore.
"We saw an unexpected increase in crude inventories, which
could be explained by higher imports and lower refinery
utilization, but the underlying concern is that demand is still
very weak."
Total U.S. oil demand over the past four weeks declined 2
percent, showing no improvement from the corresponding period
in the previous week's report.
U.S. refinery utilisation, the proportion of capacity under
operation, last week fell by 0.8 percentage point to 77.7
percent of capacity. That was the lowest level since 1990
barring hurricane disruptions.
INDUSTRIAL DEMAND
News this week that the Institute for Supply Management's
index rose to its highest since August 2004 raised expectations
for a strong recovery in U.S. manufacturing.
Oil in New York has rebounded by more than $4 this week
from a six-week low of $72.43 on Jan. 29. But prices are still
far from a 15-month high close to $84 reached on Jan. 11.
U.S. non-farm payrolls are expected to have increased by
8,000 in January, the second monthly gain since the recession
started in December 2007, according to the 20 forecasters who
have given the most accurate predictions in recent Reuters
polls. The data is due on Friday.
Some analysts remain upbeat that industrial demand for oil
will soon recover, including Barclays Capital's Paul Horsnell,
head of commodities research.
"The evidence of a recovery in manufacturing, better
trucking indications and a slow turning of the manufacturing
goods inventory cycle all still point to an improvement in
diesel demand that will eventually percolate through to the
data," Horsnell said in an e-mailed note.
FLOATING STORAGE
An unusually cold winter across the northern hemisphere
helped drain some excess oil supplies from floating storage,
but the nearing of spring may halt that process.
"Because of the winter season ending soon, we won't see
much of a further decline of inventories in floating storage,"
Lim said.
Stocks of crude oil and petroleum products stored on tanker
ships around the world likely fell by 27 million barrels last
month, reducing a floating supply overhang that has depressed
oil and product prices, U.S. bank Goldman Sachs said Wednesday
in a note to clients. []
Goldman estimates the drawdown left a total of 98 million
barrels of crude and 80 million barrels of products in floating
storage as of end-January.
State-owned Chinese oil firm CNPC expects China's crude oil
imports to increase 9.1 percent to 212 million tonnes in 2010,
or 4.24 million barrels per day, a company report showed on
Thursday. []
China's apparent oil demand will grow more than 5 percent
to 427 million tonnes this year, or 8.54 million barrels per
day (bpd), the report said.
High winds and rough seas caused pilots to stop moving
ships into and out of the key oil port of Houston late on
Wednesday, the U.S. Coast Guard said. []
(Editing by Clarence Fernandez, Himani Sarkar)
