LSE: UPDATE 7-Brent higher, U.S. crude pares losses after EIA data
By Gene Ramos
NEW YORK, July 5 (Reuters) - Brent crude oil futures retained sharp gains a
nd U.S. crude pared losses after U.S. government data on Thursday showed that U.S. crude stockpiles fell much more than expected last week.
Brent futures were off the day's high of more than $102 a barrel but were still more than a dollar up just before the inventory data was released.
Some market participants earlier had sold out of bullish positions after the European Central Bank (ECB) announced it would cut its main interest rate.
Brent had soared to the day's high after Norway's oil companies, including Statoil, called a lockout in a bid to end a strike by offshore oil and gas workers by possibly inducing government intervention. The lockout would raise Norway's production shortfall to 1.2 million barrels of oil equivalent per day.
However, Norway's labour ministry declined to say whether it would intervene but said a lockout was legal.
The move by China's central bank to cut interest rates in a fresh attempt to bolster slowing growth also supported Brent prices earlier.
By 11:30 a.m. EDT (1530 GMT), August Brent crude was up $1.52 at $101.29 a barrel, having hit a session high of $102.34.
U.S. August crude was down 3 cents, after dropping to a session low of $86.50.
U.S. crude oil inventories fell 4.27 million barrels last week, far more than the forecast in a Reuters poll for a 1.9 million-barrel decline, according to a weekly report from the U.S. Energy Information Administration.
'The (EIA) report is bullish, although its effect may be fleeting, due to the fact that a factor in the crude oil decline was much lower imports, which were impacted by Tropical Storm Debby,' said John Kilduff, partner at Again Capital LLC in New York.
Gasoline inventories rose less than expected while distillate stockpiles, which include heating oil and diesel fuel, dropped 1.05 million barrels, against the forecast for a 600,000-barrel increase, the EIA report also showed.
U.S. crude fell from its early high on data that showed the U.S. service sector, a major component of the U.S. economy, slowed to a 2-1/2-year low in June as new orders dropped, according to the Institute for Supply Management's services index.
Earlier data showed that U.S. private employers added 176,000 jobs in June, according to payrolls processor ADP, more than economists had forecast. Another set of data showed U.S. jobless claims fell last week from a revised higher number in the previous week.
