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CORRECTED-UPDATE 10-Oil falls as economic worries, stock market pressure

(Corrects to say Brent touched $117.02 on Sept 17, not Sept. 1, in 8th paragraph)

* Turkey warns Syria about cross-border shelling

* IMF warns on global financial stability

* U.S. crude stocks rose, distillates fell last week-API

* Coming up: EIA oil data, 11 a.m. EDT Thursday

By Robert Gibbons

NEW YORK, Oct 10 (Reuters) - Oil prices fell in volatile trade on Wednesday as ongoing concerns about the economy and a weak kick off to the earnings season weighed on stock markets.

Brent turned negative late as U.S. stocks fell after Alcoa posted a quarterly net loss and Chevron warned profits would fall sharply.

U.S. crude turned lower and ended down more than 1 percent.

Oil markets, which have been balancing concerns of lower global fuel demand against the risk of supply disruptions in the Middle East and loading delays of crude from the North Sea, also

watched demand forecasts from the U.S. government and the Organization of the Petroleum Exporting Countries.

Reports released on Wednesday from OPEC and the U.S. Energy Information Administration (EIA) lowered global oil demand growth forecasts amid ongoing worries about economic growth.

Crude drew early support from news of shelling along the Turkey-Syria border, hostility between Iran and the West and an impending Israeli election. Those events reinforced fears about potential threats to oil supplies from the Middle East Gulf.

"Although (U.S. crude) managed to further yesterday's Middle East driven price spike early in the session, it subsequently succumbed to a triple digit slide in the (Dow Jones industrials) that sent off further caution flags regarding global economic recovery," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

PRICES FALL Brent November crude

traded down 17 cents to settle at $114.33 a barrel after trading as high as $115.59, the highest since prices hit $117.02 on Sept. 17, according to Reuters data.

U.S. November crude

settled $1.14 lower at $91.25 a barrel. U.S. crude earlier tested resistance above the $93.33 peak from Oct. 1, after prices had stalled in consecutive sessions at intraday highs of $93.18 and $93.20 on Sept. 24 and 25.

U.S. gasoline and heating oil futures, which have been supported by low inventory levels and refinery disruptions this week, posted small gains despite the losses in crude.

U.S. OIL INVENTORIES

U.S. crude stocks rose 1.6 million barrels last week, the industry group American Petroleum Institute said on Wednesday, more than the consensus of analyst expectations.

Gasoline stocks rose 2.5 million barrels but distillate inventories fell a whopping 6.2 million barrels, API said.

Distillate stockpiles were expected to be down 500,000 barrels in the week to Oct. 5, a Reuters survey of analysts showed.

Expectations were for an 800,000-barrel build in crude inventories and no change in gasoline stocks.

The government report from the EIA will follow at 11 a.m. EDT (1500 GMT) on Thursday.

Brent's premium to U.S. crude

seesawed, then pushed higher to end at $23.08 a barrel based on settlements, after reaching $23.39, the widest spread since Oct. 2011.

"Some temporary factors are keeping it wide, including a lower-than-expected return of North Sea production and the ongoing geopolitical premiums on the Brent side," said Vikas Dwivedi, global oil and gas economist for Macquarie Group in Houston, referring to the delays in Forties cargo loading in the North Sea.

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Graphic on WTI-Brent spread:

Graphic of 24-hr chart Brent analysis:

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MIDDLE EAST, DEMAND WORRIES

Markets are closely monitoring the developments in Turkey and Syria. Turkey's military chief of staff said on Wednesday his troops would respond with greater force if bombardments from Syria kept hitting Turkish territory.

"It's not that Syria and Turkey are significant oil exporters but Iraqi crude from the northern part of Iraq (Kirkuk) flows via pipeline through Turkey to Ceyhan," said Dominick Chirichella, an energy analyst at New York's Energy Management Institute.

Gloomy economic expectations have tempered oil prices this year against geopolitical turmoil, including the risk to supplies from Iran due to sanctions from the West.

Oil prices came under early pressure from continuing worries about economic growth after the International Monetary Fund said risks to global financial stability had risen in the past six months, leaving confidence "very fragile".

No. 2 oil consumer China's annual economic growth is expected to have slowed for a seventh straight quarter in the July-September period to its weakest level since the depths of the global financial crisis, a Reuters poll showed.

(Additional reporting by Matthew Robinson in New York, Alice Baghdjian in London and Florance Tan in Singapore; Editing by Dale Hudson, Sofina Mirza-Reid and Bob Burgdorfer)

((robert.gibbons@thomsonreuters.com)(+1 646 223 6059)(Reuters Messaging: robert.gibbons.reuters.com@reuters.net))

Keywords: MARKETS OIL/