UPDATE 9-Oil falls on U.S. crude stocks rise, Europe's weak data

Marguerita Choy)

* U.S. crude settlement lowest since early July

* U.S. crude stocks rose more than expected last week - EIA

* China HSBC flash PMI improves, euro zone data poor

* Coming Up: U.S. jobless claims 8:30 p.m. EDT Thursday

(Updates prices, market activity) NEW YORK, Oct 24 (Reuters) - Brent crude prices fell for a seventh consecutive session on Wednesday as rising U.S. crude inventories and weak euro zone economic data offset supportive signs that Chinese petroleum demand could stage a recovery. Crude oil stocks in the United States jumped 5.9 million barrels last week, the U.S. Energy Information Administration said in a weekly report, well above the increase of 1.9 million barrels in a Reuters survey of analysts. Gasoline stocks rose more than expected, total distillate stockpiles eased slightly less than the consensus forecast and demand for the products over the previous four weeks was below the year-ago period. ``The report is mostly bearish, with the large increase in crude oil inventories being the highlight of the report,'' said John Kilduff, partner at Again Capital LLC in New York. Oil prices pushed higher earlier on lift when a survey of purchasing managers showed China's economy is slowly picking up from its weakest period of growth in three years.

But while the HSBC Flash Manufacturing Purchasing Managers Index (PMI) hitting a three-month high of 49.1 in October was supportive for oil prices, the reading was still below the 50-point mark that separates expanding from shrinking business activity. Brent December crude slipped 40 cents to settle at $107.85 a barrel, recovering to close back above the 100-day moving average of $107.50. Wednesday's $106.80 low was the lowest for front-month Brent since Sept. 20. The last time Brent fell seven straight sessions was in July 2010. Front-month Brent has lost $7.95, or 6.8 percent, since its last higher settlement, at $115.80 a barrel, on Oct. 15. Down for a fifth straight session, U.S. crude fell 94 cents to settle at $85.73 a barrel, lowest settlement since July, after falling to $84.94. The rise in U.S. gasoline inventories helped send U.S. RBOB gasoline futures to a tenth straight lower close, though they were off only 0.20 cent to settle at $2.6030 a gallon. U.S. heating oil slipped a ninth straight session, dipping 0.40 cent to $3.0394 a gallon, recovering after slipping below the 200-day moving average of $3.0276 during the session.

WEAK DATA FROM EUROPE Poor economic data from Europe pulled oil prices off early peaks ahead of the U.S. oil inventory report. Markit's Composite Purchasing Managers' Index, which polls around 5,000 businesses across the 17-nation bloc and is viewed as a reliable growth indicator, fell to 45.8 this month, the lowest reading since June 2009. 1/8ID: nL5E8LO4JB 3/8 Manufacturing PMI in Germany, Europe's largest economy, fell unexpectedly and business sentiment dropped for the sixth consecutive month to its lowest in more than 2-1/2 years. ``Not only do these data points support the slowing economic scenario, but the PMI manufacturing index is an energy-sensitive index and directly translates to slower energy demand,'' said Dominick Chirichella of New York's Energy Management Institute.

FED STICKS TO ITS PLAN The U.S. Federal Reserve on Wednesday stuck to its plan to keep stimulating U.S. growth until the job market improves even as it acknowledged some parts of the economy were looking a bit better. Weak European data muted the reaction to U.S. data showing that new home sales increased 5.7 percent to the fastest pace since April 2010, when sales were boosted by a tax credit for first-time home buyers.

(Additional reporting by Simon Falush and Alice Baghdjian in London and Manash Goswami and Florence Tan in Singapore; Editing