* Prices choppy after near $4 hike on Wednesday
* Iran tensions provide some support
* Distillate stocks at 26-year highs
(Recasts, updates throughout)
By Emma Farge
LONDON, Oct 1 (Reuters) - Oil eased slightly in choppy trade
on Thursday after the biggest daily jump since April as traders
weighed mixed data about the health of the United States
economy.
U.S. crude futures <CLc1> fell 9 cents to $70.52 a barrel by
1422 GMT, after rising nearly $4 on Wednesday which was the
biggest daily jump in dollar terms since April.
Earlier, U.S. crude prices fell by $1 from the previous
close to $69.61 a barrel as investors eyed high distillate
stocks ahead of the winter.
London Brent crude <LCOc1> were steady at $69.07 a barrel.
But economic data later took a precedent over more
conventional oil market fundamentals later as investors raked
through fresh economic data for signs of how quickly the world's
largest energy consumer would emerge from recession.
Losses were capped by positive economic data showing that
U.S. consumer spending rose at its fastest pace in nearly eight
years in August, advancing for a fourth straight month,
according to a government report on Thursday. []
"Consumer spending sent a positive signal but the market
doesn't like it much over $70 and it is likely to come back down
after this little bounce," said Global Insight analyst Simon
Wardell.
News of an unexpected rise in the number of U.S. workers
seeking jobless benefits was seen as a bearish factor.
[]
On the supply side, talks between Iran's top nuclear
negotiator and six world powers in Geneva were scheduled for
Thursday, which U.S. officials said could offer an opportunity
for a rare bilateral meeting with the Iranians. []
Tensions over the oil exporter's nuclear programme have been
a bullish factor in oil markets in recent years.
FUNDAMENTALS MIXED
On Wednesday, a surprise drop in U.S. gasoline stocks
triggered a price rally that enabled crude to squeeze out a
slight gain for the third quarter in a move which boosted
commodity indexes overall. []
But analysts said on Thursday that it was too soon to talk
of a strong upturn in demand and some expected prices to soon
correct lower.
"Aspects of the weekly petroleum report were supportive, at
least relative to expectations but the data was really a mixed
affair," said Citi analyst Tim Evans in a research note,
adding,"To our eye, the rally looks very much overdone, with hot
money simply chasing the price dynamically higher."
Data from the U.S. government Energy Information Agency
(EIA) showed a 1.6 million-barrel drop in gasoline stocks for
the Sept. 25 week.
Distillates increased by 300,000 barrels, but were still at
a 26-year high of 171.1 million, coming ahead of winter demand.
[]
(Editing by William Hardy)
