* Sharp fall in U.S. crude inventories digested
* Gulf of Mexico producers focus on Tropical Storm Nate
* Coming up: Obama speech, 7 p.m. EDT (2300 GMT) (Recasts, updates prices and market activity to settlement)
By Gene Ramos
NEW YORK, Sept 8 (Reuters) - Crude oil futures fell in choppy trading on Thursday, following Wall Street lower after the U.S. Federal Reserve Chief gave a speech that lacked new steps to spur economic growth, and as the dollar rose sharply.
In early trade, oil dipped on data showing many more Americans than expected filed new claims for jobless benefits, stoking worries about the economy. [ID:nN1E7870A9] Oil then rose to session highs after government data showed U.S. crude inventories fell much more than expected last week and on prospects of more bad weather in the Gulf of Mexico.
In London, Brent crude for October delivery
U.S. October crude
Brent's premium against U.S. crude, also known as West
Texas Intermediate, narrowed to $25.50 at the close, from
$26.46 on Wednesday. The premium hit an intraday record of
$27.23 on Tuesday.
"The dollar rose against the euro and that pulled down U.S. equities, dragging crude futures lower." said Tom Knight, trader at petroleum product marketeres Truman Arnold in Dallas,
"Crude rose on the inventory drawdown earlier ... a deeper sell-off is being prevented by fears that Tropical Storm Nate may head to areas in the Gulf of Mexico where there are production sites." Knight added.
The euro slid on signals from the European Central Bank of intensified risks to euro zone growth. The dollar rose further against the single currency fell deeper as Fed Chief Ben Bernanke pledged to help shore up the U.S. economy, although he did not specify what action the Fed would take. [USD/] <.DXY>
Wall Street fell back after Bernanke's comments as investors were disappointed he did not offer details on what measures Fed policymakers would pursue. [.N]
For details of Bernanke's speech, see [ID:nN1E7860OB]
Traders were cautious ahead of a speech by U.S. President Barack Obama before the U.S. Congress that will call for urgent steps to spur the economy and create jobs.
Obama is scheduled to speak at 7 p.m. EDT (2300 GMT) and is expected to lay out a $300 billion jobs plan.
Earlier, European Central Bank President Jean-Claude Trichet underlined risks to the economy at a press conference following the ECB's decision to keep interest rates steady, as expected. [ID:nECBNEWS]
CRUDE STOCKS DOWN SHARPLY, NATE WATCHED
The U.S. Energy Information Administration said commercial crude oil inventories fell nearly 4 million barrels last week, far deeper than the forecast for a 1.9 million barrel drawdown. [EIA/S]
Inventories dropped as imports slid more than 1 million barrels per day with offloadings hampered by Hurricane Irene's passage through the East Coast that also compelled refineries to cut utilization rates by more than a quarter.[ID:nWEN8048]
Tropical Storm Nate, the 14th named storm of the busy 2011 hurricane season, was gaining strength and could become a hurricane on Friday or Saturday, the U.S. National Hurricane Center said. [ID:nL3E7K83HF]
The tropical storm has prompted producers in the Gulf of Mexico to begin another round of evacuations of nonessential workers. [ID:n1E7870Z1]
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For a 24-hour technical outlook on Brent:
http://graphics.thomsonreuters.com/WT1/20110809091615.jpg
For FACTBOX on Obama's jobs speeches [ID:nN1E7850JU]
For analyst view on Obama's speech: [ID:nN1E78518T]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Robert Gibbons in New York; Barbara Lewis, Simon Falush and Christopher Johnson in London; and Seng Li Peng in Singapore)