Brent slips to 4-month low below US$105

SINGAPORE: Brent crude slipped below US$105 a barrel on Thursday to its lowest since early July as investors held back from locking in in fresh positions ahead of key announcements due later in the day from Europe and the United States.

Investors are waiting for the outcome of the European Central Bank's policy meeting and the US third-quarter GDP numbers to gauge the developed nations' oil demand outlook.

US crude, however, drew strength from a steeper-than-expected drop in gasoline stocks in the world's top oil consumer.

Brent, which fell as low as US$104.80 a barrel, was down 31 cents at US$104.93 by 0729 GMT.

US oil rose to a high of US$95, after settling up US$1.43 on Wednesday, and traded 7 cents lower at US$94.73.

"The U.S. benchmark is drawing support from the steep fall in oil product stockpiles we saw in the data overnight, suggesting a pick-up in demand," said Ben Le Brun, market analyst at OptionsXpress in Sydney.

"Overall, we will see oil and other markets trade in a tight range today as everybody is waiting for ECB's interest rate decision and US GDP numbers."

US gasoline stocks fell 3.8 million barrels, much larger than the 300,000-barrel draw analysts had expected, according to data from the US Energy Information Administration (EIA).

Gasoline demand last week was also at its highest level for this time of the year since 2010.

US distillates stocks fell 4.9 million barrels last week, against forecasts for a 1.3-million-barrel draw, to 118 million barrels, the data showed.

The steep drawdowns in oil product stockpiles overshadowed a rise in crude inventories to 385 million barrels in the week ending November 1, the largest seven-week build since May 2012.

"The lower-than-expected increase in US crude stockpiles helped to support US crude despite this increase being the seventh consecutive increase in supplies," analysts at Phillip Futures said in a note to clients.

Investors are awaiting details of US nonfarm payrolls data on Friday to gauge when the Federal Reserve might begin winding down its US$85 billion-a-month bond-buying programme. A roll-back would boost the dollar, making dollar-denominated assets such as oil more expensive for holders of other currencies.

Before that markets will look to the first reading of US
third-quarter GDP data later in the day. Economists in a Reuters survey forecast a 2.0 per cent annualised rate of growth compared with 2.5 per cent in the second quarter.

Data on Wednesday showed the euro zone's economic recovery lost a little momentum last month, making the US numbers all the more crucial to gauge the demand growth outlook.

"So the markets are now looking for what the ECB will say in its policy meeting today on how it plans to drive growth," Le Brun from OptionsXpress said.

Continued progress in talks between Iran and the West over Tehran's disputed nuclear programme is also weighing on sentiment. Although both sides say an agreement is far from certain, world powers will seek to hammer out a breakthrough deal with Iran to start resolving the decade-old dispute