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UPDATE 9-Oil seesaws; Wall Street tumble offsets Cushing draw data

Published 25/09/2015, 04:11 am
© Reuters. UPDATE 9-Oil seesaws; Wall Street tumble offsets Cushing draw data
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* Key U.S. stock index S&P down more than 1 pct, weighing on oil

* Crude up earlier on 625,000 bbl Cushing draw cited by Genscape (Adds latest price moves, context on oil's Q3 performance)

By Barani Krishnan

NEW YORK, Sept 24 (Reuters) - Oil prices seesawed on Thursday as tumbling stock prices on Wall Street offset bullish sentiment from inventory draws at the U.S. crude delivery hub cited by a market data provider.

U.S. equities' key Standard & Poor's 500 index .SPX fell 1 percent or more as prices of industrial stocks fell on concerns of slowing global economic growth. .N

That pared the gains in oil, which rallied earlier on data from market intelligence firm Genscape suggesting a drawdown of 625,000 barrels out of the Cushing, Oklahoma delivery point for U.S. crude in the week to Sept. 22.

"There was a technical bounce after the Genscape numbers were noticed by the market, though there were also new lows from sell-stops after the S&P tanked," said Peter Donovan, broker at New York's Liquidity Energy.

Brent LCOc1 was last up 27 cents, or 0.6 percent, at $48.02 a barrel by 1:54 p.m. EDT (1754 GMT). It fell 35 cents at the session low and rose 72 cents at the peak.

U.S. crude CLc1 also rose 0.6 percent, or 26 cents, to $44.74, after moving in a similar range as Brent.

U.S. crude tumbled 4 percent on Wednesday after a large build in gasoline stockpiles offset the bullish impact of a crude drawdown for the week to Sept. 18 reported by the U.S. Energy Information. EIA/S

The motor fuels build after the end of the peak U.S. summer driving season raised new concerns about high product stocks during autumn months in the world's largest oil consumer.

The Cushing inventory USOICC=ECI reduction reported by Genscape on Thursday followed through with the 462,000-barrel drop the EIA reported for the hub for the week to Sept. 18.

Oil is down more than 25 percent so far this quarter, the second largest drop since 2008 driven by a glut in supply and doubts about the global growth outlook.

Higher inventories and sluggish demand make many analysts think the long-term outlook for crude will remain downbeat.

"Long-dated contracts are ticking lower and that will push prompt prices lower to ensure there is still a contango," Bjarne Schieldrop, chief commodity analyst at SEB in Oslo, said.

Contango is a market structure where oil for later delivery is pricier than the prompt contract, making it profitable to store oil.

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