* U.S., Chinese data boost worries about demand
* Analysts expect EIA data to show US crude stock rise
* API shows slight stock draw, but oil holds losses
* Coming up: EIA oil data at 10:30 a.m. EST Wednesday
(Updates with API report results)
By Robert Gibbons
NEW YORK, Feb 15 (Reuters) - Brent oil fell more than 1
percent on Tuesday in volatile trading as disappointing U.S.
retail sales growth and China's battle against rising inflation
boosted worries about demand from the world's two largest
energy consumers.
U.S. crude prices pulled back ahead of weekly oil inventory
reports expected to show U.S. crude oil stocks rose last week.
While protests in Iran and other Middle East countries
remained a concern, analysts looked for some unwinding of the
geopolitical fear premium put in during Egypt's protests.
"There may be some unwinding of the fear premium on overall
risk reduction as the Middle East hasn't gotten out of control
yet and traders also are getting ready for another expected
rise in U.S. oil supplies," said Phil Flynn, analyst at PFGBest
Research in Chicago.
Brent's more pronounced retreat had some traders and
analysts expecting the wide gap between the two benchmarks to
come under pressure.
Brent crude <LCOc1> for April delivery fell $1.44 to settle
at $101.64 a barrel. Prices hit a 28-month peak at $104.30 on
Monday.
U.S. crude <CLc1> for March delivery fell 49 cents to
settle at $84.32 a barrel.
Brent's premium to U.S. crude <CL-LCO1=R> seesawed between
$13.24 and $14.90 on Tuesday. Brent's premium to U.S. crude
surged to a record above $16 a barrel on Friday, still
measuring the two March contracts before the March Brent's
expiration.
"That Brent/WTI spread may be getting a little heavy," said
Richard Ilczyszyn, senior market strategist at Lind-Waldock in
Chicago.
U.S. crude has been dogged by high crude oil inventories,
especially at the landlocked Cushing, Oklahoma, contract
delivery point for the benchmark West Texas Intermediate.
U.S. crude stocks fell 354,000 barrels in the week to Feb.
11, against expectations supplies would be up, according to the
industry group the American Petroleum Institute's weekly report
released late on Tuesday. []
But Cushing stockpiles rose 250,000 barrels, the API said.
Distillate stocks fell 1.2 million barrels and gasoline
stocks rose 1.2 million barrels, according to the API.
U.S. crude prices held losses in post-settlement trading
after the release of the report.
Analysts surveyed by Reuters ahead of the API report
expected U.S. crude inventories to be up 2.2 million barrels
last week. []
Distillate stocks were forecast down 800,000 barrels while
gasoline stocks were expected to be up 1.7 million barrels.
The U.S. Energy Information Administration's report is set
for release at 10:30 a.m. EST (1530 GMT) on Wednesday.
CHINESE INFLATION
China's consumer price inflation came in lower than
expected for January at 4.9 percent. []
But core inflation, stripped of volatile food prices,
jumped to 2.6 percent year on year, the highest since at least
2002 and up from 2.1 percent a month earlier.
Concern that China may continue monetary tightening and
curb demand growth pulled copper prices off record highs.
[]
MIXED U.S. ECONOMIC DATA
U.S. stocks slid as energy shares pulled back, and after
initially slipping on the smaller-than-expected rise in retail
sales that fueled doubts about consumer spending. []
U.S. retail sales growth slowed in January, but at least
some oil traders and analysts saw the data as supportive or
neutral considering the extreme weather that curbed shopping
traffic.
U.S retail gasoline demand fell for a second consecutive
week, affected by rising retail prices, a report from
MasterCard showed. Demand was up and gasoline prices were up
19.5 percent from the year-ago period. []
Early on Tuesday, some brokers and analysts pointed to
supportive data such as the New York Federal Reserve's gauge of
manufacturing in New York State which climbed in February to
its best mark since June. []
(Additional reporting by Claire Milhench in London, Jennifer
Tan in Singapore and Gene Ramos in New York; Editing by Lisa
Shumaker)
