* Yen flies on election result; China stocks drop
* Japan output rises more than forecast, up 5th month
* Hurricane Jimena no threat to oil rigs (Releads, updates
prices, analyst's comments)
By Fayen Wong
PERTH, Aug 31 (Reuters) - Oil fell towards $72 a barrel on
Monday, as a drop in China's key stock index stoked worries
about the country's economy, but hopes that energy demand would
soon rebound are on track to push prices up about 4 percent in
August.
Oil prices slipped 1.56 percent last week but are set to
chalk up gains of 4.13 percent in August, as a raft of upbeat
economic data across the globe helped offset high U.S. oil
inventory levels.
U.S. crude for October delivery <CLc1> fell 33 cents to
$72.41 a barrel by 0402 GMT, erasing the previous session's
gains of 25 cents.
London Brent crude fell 45 cents to $72.34 a barrel.
"The sharp drop in Chinese markets is causing concerns and
is inevitably making some investors rethink on the risks to
China's economy and question their assumptions on the country's
growth rate and energy consumption," said Daniel Liu, a
commodities strategist at MG Global Singapore.
The Shanghai Composite Index <> plunged as much as 5.4
percent to a three-month low of 2,706.129 points on Monday,
breaking below the key 125-day moving average used by Chinese
investors to delineate a bull from a bear market.
[]
Jitters about the Chinese economy also weighed on other
Asian stock markets, with the MSCI index of Asia-Pacific stocks
traded outside Japan <.MIAPJ0000PUS> falling 1.4 percent.
Earlier in the day, oil had risen amid growing optimism
about a global economy recovery, with positive data from Japan
adding to the ebullience.
Industrial output in Japan, the world's No. 3 energy
consumer, rose 1.9 percent in July to increase for a fifth
straight month as exports recovered on the back of stimulus
spending around the world, and the pace of rise is expected to
accelerate in the coming months. []
Qatar's Oil Minister Abdullah al-Attiyah said on Sunday
that OPEC was likely to keep oil output targets unchanged when
it next meets in September, echoing separate comments by a
senior Gulf OPEC delegate that the decision was made on
expectations for demand to strengthen over winter on the back
of a global economic recovery. [][]
In a sign that OPEC producers are beginning to ease supply
restraints, Abu Dhabi will lift its crude oil supplies to Asian
refiners in October versus the previous month, the state oil
firm said on Saturday. []
On the weather front, Hurricane Jimena blew into a
dangerous Category 4 storm off Mexico's Pacific Coast and was
on track to hit resorts on the Baja California peninsula on
Tuesday, although there were no threats to oil rigs.
[]
Separately, Iran has slowed its expansion of uranium
enrichment and met some demands for transparency but
allegations it researched how to build atom bombs looked
credible and the U.N. atomic watchdog said Tehran had to
address them. []
(Reporting by Fayen Wong; Editing by Clarence Fernandez)
