* EIA weekly inventory data due 1430 GMT to set trading tone
* US August jobs and July factory orders data seen positive
* Weaker global equities pressure oil prices
(Updates prices, adds Russian oil output)
By Joe Brock
LONDON, Sept 2 (Reuters) - Oil rose above $68 a barrel on
Wednesday, after a 3 percent drop in the previous session, as
data showing a fall in U.S. crude stocks raised expectations of
demand growth in the world's biggest energy consumer.
The U.S. Energy Information Administration (EIA) will
release weekly crude inventory data at 1430 GMT as the market
looks for confirmation of Tuesday's bullish report from the
American Petroleum Institute (API).
U.S. crude for October delivery <CLc1> was up 42 cents at
$68.47 a barrel by 0952 GMT, after touching a two-week low of
$67.85 earlier on Wednesday and falling nearly 3 percent to
settle on Tuesday at $68.05. London Brent crude rose 40 cents to
$68.13 a barrel.
"I think oil was supported after the API report, which
showed a surprisingly large drawdown in inventories, so some may
bet on a similar outcome in the EIA data," said Carsten Fritsch,
oil analyst at Commerzbank.
However, Fritsch warned that there were no guarantees
Wednesday's data would match the API numbers.
"The correlation between the two (reports) hasn't been that
great in the last month so I'm not overly optimistic."
WEAKER STOCK MARKETS
Weaker global stock markets limited oil's gains on Wednesday
after an overnight sell off on Wall Street, with both Asia and
Europe rattled by concerns over the sustainability of this
year's equity rally. []
Japan's Nikkei average <> sank 2.5 percent on
Wednesday, with exporters hurt by a stronger yen and sentiment
dented by uncertainty over the U.S. financial sector's health.
Oil prices rose after API data showed that U.S. crude stocks
fell 3.2 million barrels in the week to Aug. 28, a larger drop
than the forecast of a 600,000-barrel drawdown. []
Less supportive news for oil prices came from China, where
crude stocks climbed to near-record highs at the end of July, an
industry newsletter reported, as crude imports outpaced the
record amount of crude refiners processed. []
Economic data due later -- August unemployment figures at
1215 GMT and July factory orders at 1400 GMT, both which are
expected to be positive -- could underscore the U.S. economy's
gradual pace of recovery and offer more trading cues.
Economists polled by Reuters expect 250,000 job losses in
August, down from 371,000 in July. Factory orders are expected
to rise 2.2 percent in July, versus a 0.4 percent gain in June.
The Organization of the Petroleum Exporting Countries is
likely to leave output targets unchanged when it next meets
meets on Sept. 9 in Vienna.
Adding to already high inventories, OPEC has reduced its
compliance with agreed production curbs, a Reuters survey on
Tuesday found. []
OPEC supply in August rose for a fourth consecutive month as
Saudi Arabia, Nigeria and Venezuela increased their production,
taking overall output discipline to 68 percent of the target
from a revised 70 percent in July. []
Russian oil output hit a record high in August, nearing 10
million barrels per day as the country launched a new giant
field, while gas production recovered from its lows on improved
demand. []
August oil output rose to 9.97 million barrels per day, up
0.6 percent from 9.91 million bpd in July and 1.5 percent higher
than 9.82 million bpd in August 2008.
(Editing by Anthony Barker)
