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UPDATE 5-Oil falls as European, Asian economic data weighs

* U.S. manufacturing sector expands in September

* China's factory activity shrinks for 2nd month in Sept

* Euro zone manufacturing points to new recession

By Adam Kerlin

NEW YORK, Oct 1 (Reuters) - Brent crude fell slightly on Monday in choppy trading as oil markets balanced better-than-expected U.S. manufacturing data against signs of economic weakness in Asia and evidence of a new recession in the debt-saddled euro zone.

The international benchmark came under early pressure from data showing factory activity in No. 2 oil consumer China contracted, while euro zone manufacturing suffered the worst quarter for three years in the three months to September.

Prices briefly pushed higher in early U.S. activity after data showed U.S. manufacturing expanded in September, shaking off three months of weakness as new orders and employment picked up. The data helped keep U.S. crude in positive territory, even as Brent shook off gains to trade lower.

"This is a market that has plenty of excuses for moving higher," energy analyst Tim Evans of Citi Futures Perspective said, pointing to the U.S. Federal Reserve's latest quantitative easing and geopolitical tensions in the Middle East.

"But without stronger physical demand for petroleum, higher price levels will not be sustainable."

Oil markets have been weighing unrest in the Middle East and the potential for supply disruptions as well as maintenance-related delays in North Sea crude shipments against weak fuel demand and economic data in recent weeks.

Front-month Brent crude traded down 79 cents at $111.60 a barrel by 11:54 a.m. EDT (1554 GMT), off highs of $113.27.

U.S. crude rose 7 cents to trade at $92.26 a barrel, having hit $93.33.

Brent gained 14.9 percent in the third quarter, following a drop of 20 percent in the second quarter, while U.S. crude rose 8.5 percent in the quarter after slumping 17.5 percent in April-June.

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(Editing by Dale Hudson and Keiron Henderson)

((ramya.venugopal@thomsonreuters.com)(+65 6870 3826)(Reuters Messaging: ramya.venugopal.thomsonreuters.com@reuters.net))

Keywords: MARKETS OIL/