UPDATE 10-Oil falls on US inventory build, eyes bailout plan

                                
 * Weekly U.S. data also shows fall in fuel demand
                                
 * Market awaits U.S. Senate vote on bailout package
 (Updates with settlement prices, adds details)
                                
 NEW YORK, Oct 1 (Reuters) - Oil prices fell on Wednesday as
U.S. government data showed supplies rising and global markets
awaited a U.S. Senate vote on the financial sector rescue
package.
                                
 U.S. crude <CLc1> settled at $98.53 a barrel, down $2.11.
London Brent crude <LCOc1>  settled down $2.95 at $95.22 a
barrel.
                                
 U.S. crude oil inventories rose by 4.3 million barrels last
week, data from the Energy Information Administration showed,
as output from the Gulf of Mexico continued to recover from
disruptions caused by Hurricane Ike.
                                
 Gasoline inventories showed a surprise 900,000-barrel rise
as more refinery capacity came back online following the storm,
which caused the worst disruption to the U.S. energy sector
since the 2005 hurricane season. [EIA/S]
                                
 "The EIA data today showed the first signs of recovery
after Hurricane Ike. The energy industry in the U.S. Gulf Coast
is on the road to recovery, and this will add to the bearish
sentiment in the market," said Phil Flynn, an analyst with
Alaron Trading in Chicago.
                                
 Traders have kept a close watch on the slow recovery of
U.S. oil infrastructure after Hurricane Ike hit the oil-rich
U.S. Gulf of Mexico on Sept. 13. [ID:nN30441495]
                                
 Total U.S. oil product demand over the past four weeks fell
7.1 percent from a year earlier, as the growing economic crisis
and high fuel costs continued to clip demand in the world's top
consumer.
                                
 Oil prices have tumbled from record highs above $147 a
barrel in July on signs of slowing oil demand from industrial
economies.
                                
 Pressure has also come as investors sell oil and other
commodities and move cash into safer investments amid turmoil
in financial markets.
                                
 The Senate was expected to vote late on Wednesday on a new
version of the $700-billion rescue package for Wall Street,
rekindling hopes that the credit crisis can be eased before
claiming yet more banks and causing further damage to the
global economy. [ID:nL1596334]
                                
 "On a macro front, all eyes will remain on the $700-billion
package going to vote in the Senate tonight and possibly back
in the House (of Representatives) the second half of the week,"
said Chris Jarvis, senior analyst at Caprock Risk Management in
New Hampshire.
                                
 "Failure to pass would put pressure across the board, while
passing of the package would likely create a relief rally," he
added.
                                
 The House of Representatives was expected to vote on the
package on Friday.
                                
 The U.S. dollar rose against a basket of currencies
Wednesday in anticipation of the bailout, adding additional
pressure on oil prices. [ID:nN01503715]
                                
 Further signs of demand weakness came as industry data
showed Japan's crude and main fuel inventories rising last week
as refiners curbed production for a sixth straight week due to
slowing consumption. [nT136587]
 (Reporting by Rebekah Kebede in New York, Ikuko Kao in London
and Fayen Wong in Perth; Editing by Walter Bagley)