UPDATE 8-Oil falls on weak China manufacturing data
* China July flash HSBC PMI falls to 11-month low
* EIA reports crude, products stockpiles fall
(Updates prices, adds comments on EIA data; dateline previously London)
NEW YORK, July 24 (Reuters) - Oil futures fell by almost $2 a barrel on Wednesday as weak Chinese economic data renewed concerns over demand growth from the world's second-largest oil consumer.
Activity in China's manufacturing sector slowed to an 11-month low in July as new orders faltered, a preliminary survey showed on Wednesday, pointing to slower economic growth.
A sub-index of the HSCB/Markit Purchasing Managers' Index, an indicator of Chinese employment based on company surveys, slid to 47.3 in July, the weakest since March 2009. It stood at 47.6 in June and has been below the 50 mark that separates growth from contraction for four months.
"It adds to the concern about the outlook for demand and brings into question just how strong Chinese commodities demand will be," Alexandra Knight, economist at National Australia Bank, said.
Brent crude was down $1.57 to $106.85 a barrel by 1:06 p.m. (1806 GMT), after settling up 27 cents on Tuesday.
U.S. crude, also known as West Texas intermediate, was down $1.92 at $105.31, after ending 29 cents higher. Brent's premium over WTI was $1.54, widening after hitting parity for the first time in almost three years on Friday.
Gasoline futures slipped from levels seen on Tuesday, losing 0.25 percent to around $3.05 a gallon.
U.S. OIL INVENTORIES DOWN
Oil briefly recovered some losses after the release of inventory figures from EIA, which showed crude oil stocks fell slightly more than expected last week.
Crude oil stockpiles fell by 2.8 million barrels to 364.2 million barrels against a forecast of a 2.5 million barrel drop. Over the past four weeks, crude stockpiles were down nearly 30 million barrels, the biggest four-week decline on record.
Gasoline inventories decreased by 1.8 million barrels over the last week, remaining above the upper limit of the average range for this season. Distillate fuel stockpiles fell by 1.2 million barrels.
Still, the data showed fuel demand increases across the board. Distillate demand over the last four weeks climbed to 4.11 million barrels per day, 17.8 percent higher than the same period a year ago. Gasoline demand over the same period also grew, reaching 9.08 million barrels per day, a 3.1 percent increase from last year.
"We did have increased fuel demand, which should be supportive across the board and should provide a boost for the market, but I'm not sure it's strong enough to get a real charge in the market," said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut.
(Additional reporting by Anna Sussman in New York; Simon Falush and Christopher Johnson in London; and Manash Goswami in Singapore; editing by William Hardy and Leslie Adler)