* Oil falls on first day of H2; down for 4th straight day
* U.S. fuel stockpiles post surprise gains -EIA
* China's manufacturing growth slows in June
(Updates prices)
By Joe Brock
LONDON, July 1 (Reuters) - Oil fell below $75 a barrel on
Thursday, beginning the second half of the year on a weak note
after falling nearly 5 percent in the first half, as signs of
slowing economic growth in China fuelled energy demand doubts.
The pace of manufacturing growth in the world's second
largest oil consumer slowed in June as government steps to cool
the property market and curb bank lending combined with a
faltering global recovery. []
U.S. crude for August delivery <CLc1> fell $1.07 to $74.56 a
barrel by 1137 GMT, declining for the fourth straight session
and extending the 10 percent slide of the second quarter, the
first quarterly drop since 2008.
ICE Brent <LCOc1> fell 1.17 on Thursday to $73.84.
"I think oil is reflecting general negative commodity market
sentiment after weaker-than-expected China PMI data overnight,"
said Carsten Fritsch, oil analyst at Commerzbank in Frankfurt.
"Weaker equity markets are also weighing on sentiment," he
added.
The China data, and Moody's decision on Wednesday to put
Spain's credit ratings under review, got broader markets off to
a weak start for the new quarter. European equities fell 1
percent, Japanese stocks slid to a seven-month low and China's
to a 15-month trough. []
China's official purchasing managers' index (PMI) fell to a
weaker-than-expected 52.1 in June, the lowest since February,
from 53.9 in May. The indicator remained above the 50 threshold
that indicates an expansion.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic on China's PMI versus crude prices:
http://graphics.thomsonreuters.com/10/CN_OILPMI0710.gif
For a graphic on the performance across commodity markets
this year: http://link.reuters.com/hun72k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
U.S. SUPPLIES, JOBS REPORTS
Adding to negative sentiment on demand, U.S. gasoline
stockpiles posted surprise gains last week, government
statistics showed on Wednesday, raising doubts about the speed
of consumption recovery in the world's top consumer. []
Crude stockpiles fell 2 million barrels in the week to June
25, compared with expectations for a decline of 900,000 barrels.
Cushing, Oklahoma, crude supplies shed 795,000 barrels to 36
million barrels.
The recent slip from record high storage at the Cushing hub
has helped narrow the price spread between the front-month and
near-month U.S. crude contracts.
The spread narrowed to 55 cents <CL-1=R> on Thursday, from
$1.27 on Wednesday, which could signal an improvement in
near-term demand.
Traders were also looking to the nation's weekly jobless
claims later on Thursday and June's employment report on Friday
for further indications about the direction of the economy in
the world's largest fuel consumer. []
"The data in the next two days is particularly important and
has the potential to move oil prices," said David Moore, an
analyst at the Commonwealth Bank of Australia.
Hurricane Alex drenched the Texas-Mexico border on Thursday
as the powerful storm hit Mexico's Gulf coast, spawning
tornadoes and flooding towns, but it spared U.S. oil wells.
[]
"Hurricane Alex made landfall and didn't have an impact on
oil production. I think some people are taking profits after
prices rose on possible fears it would hit output," Fritsch
said.
(Additional reporting by Alejandro Barbajosa in Singapore;
Editing by William Hardy and Sue Thomas)
