UPDATE 9-Oil falls, weighed down by stock market, economic worries

* Turkey warns Syria about cross-border shelling

* IMF warns on global financial stability

* Coming up: API oil data, 4:30 p.m. EDT Wednesday

By Robert Gibbons

NEW YORK, Oct 10 (Reuters) - Oil prices fell in volatiletrade on Wednesday due to ongoing concerns about the economy anda weak kick off to the earnings season that weighed on stockmarkets.

After trading higher for most of the U.S. session, Brentturned negative as U.S. stocks fell after Alcoa posted aquarterly net loss and Chevron warned profits would fallsharply. U.S. crude traded lower throughout the day, ending downmore than 1 percent.

Oil markets, which have been balancing concerns of lowerglobal fuel demand against the risk of supply disruptions in theMiddle East and loading delays in crude from the North Sea, werealso closely watching forecasts from the U.S. government and theOrganization of the Petroleum Exporting Countries.

Reports released on Wednesday from OPEC and the U.S. EnergyInformation Administration lowered global oil demand growthforecasts amid ongoing worries about economic growth.

Crude found early support from news of shelling along theTurkey-Syria border, hostility between Iran and the West and animpending Israeli election reinforced fears about potentialthreats to oil supplies from the Middle East Gulf.

"Although (U.S. crude) managed to further yesterday's MiddleEast driven price spike early in the session, it subsequentlysuccumbed to a triple digit slide in the DJII that sent offfurther caution flags regarding global economic recovery" JimRitterbusch, president at Ritterbusch & Associates, said in anote.

PRICES FALLBrent November crude

traded down 17 cents to settleat $114.33 a barrel after trading as high as $115.59, thehighest since prices hit $117.02 on Sept. 1, according toReuters data.

U.S. November crude

settled $1.14 lower at $91.25 abarrel. U.S. crude earlier tested resistance above the $93.33peak from Oct. 1, after prices had stalled in consecutivesessions at intraday highs of $93.18 and $93.20 on Sept. 24 and25.

U.S. gasoline and heating oil futures, which have beensupported by low inventory levels and refinery disruptions thisweek, showed small gains despite the losses in crude.

Traders will be closely watching weekly U.S. inventory datafrom the American Petroleum Institute and the U.S. EnergyInformation Administration, due out late Wednesday and Thursdaymorning, respectively, for further signals about productstockpiles.

Analysts polled by Reuters forecast a 500,000 barrel draw indistillate stockpiles in the week to Oct. 5, an 800,000 barrelbuild in crude inventories, and no change in gasoline levels.

Brent's premium to U.S. crude

pushed higher tonear $23 a barrel in late activity after hitting $23.17, thewidest level since Oct. 2011.

"Some temporary factors are keeping it wide, including alower than expected return of North Sea production and theongoing geopolitical premiums on the Brent side," said VikasDwivedi Global Oil & Gas Economist for Macquarie Group inHouston, referring to the delays in Forties cargo loading in theNorth Sea.


Graphic on WTI-Brent spread:

Graphic of 24-hr chart Brent analysis:



Markets were closely watching developments between Turkeyand Syria for signs of any action which could threaten oilsupplies. Turkey's military chief of staff said on Wednesday histroops would respond with greater force if bombardments fromSyria kept hitting Turkish territory.

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

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

Oil prices came under early pressure from continuing worriesabout economic growth after the International Monetary Fund saidrisks to global financial stability had risen in the past sixmonths, leaving confidence "very fragile".

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

(Additional reporting by Matthew Robinson in New York, AliceBaghdjian in London, and Florance Tan in Singapore; Editing byDale Hudson and Sofina Mirza-Reid)

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

Keywords: MARKETS OIL/