UPDATE 5-Brent crude oil slips towards $107 on strong supplies
* China HSBC flash PMI hits 7-month high in Oct
* EIA reports big rise in U.S. crude stocks
* Grangemouth dispute supporting oil
LONDON, Oct 24 (Reuters) - Brent crude futures slipped to near $107 a barrel on Thursday as rising supplies of crude oil in the United States drove prices toward a two-month low, while U.S. crude fell for a fourth straight session to its lowest since June.
The selling was not as heavy as in the previous session, however, after a preliminary survey showed China - the world's second-largest oil consumer - posted the fastest growth in its manufacturing sector in seven months in October.
The Markit/HSBC Purchasing Managers Index (PMI) for China stood at 50.9 in October, above September's final reading of 50.2 and boosting the outlook for global oil demand.
Brent crude oil was down 51 cents to $107.29 a barrel by 9:30 a.m.(1330 GMT) after falling by more than $2 in the previous session as figures from the U.S. Energy Information Administration (EIA) pointed to ample supply. A move below $106.81 would mark a ten-week low for the international benchmark.
The U.S. crude oil benchmark, also known as West Texas Intermediate or WTI, shed 70 cents to $96.16 a barrel and touched a four-month low of $95.95.
"Oil prices are stabilising after some heavy losses," said Christopher Bellew, an oil analyst at Jefferies Bache in London.
The Brent-WTI spread , which briefly moved above $13 a barrel on Wednesday, its widest in six months, traded near $11 a barrel after posting a late recovery in the previous session.
Lingering uncertainty over the future of Scotland's Grangemouth refinery lent some support to Brent, but the market's focus remained on rising U.S. crude supplies.
The EIA said on Wednesday that stocks rose by 5.2 million barrels last week, the fifth-largest build of the year, with stocks at the Cushing hub, delivery point of the WTI futures contract, rising for a second week in a row.
"The EIA data feeds into a weaker picture for WTI," said Gareth Lewis-Davies, senior energy strategist at BNP Paribas.
Jefferies Bache analyst Bellew said oil investors were likely to trade cautiously ahead of the next round of talks between Iran and world powers over Tehran's disputed nuclear programme.
Washington described last week's negotiations as the most serious and candid to date, and the parties have agreed to meet again in Geneva on Nov. 7-8.
Any relaxation of the sanctions regime against OPEC member Iran could push down oil prices.
On Grangemouth, union leaders said they had accepted demands from Switzerland-based Ineos that may help avert closure of the refinery and nearby petrochemical plant.
Grangemouth, which supplies most of Scotland with fuel, provides steam to a plant that processes Forties, the largest crude oil stream underpinning Brent futures.