* U.S. crude and product stocks rise, pressures prices
* U.S. gasoline demand down 3.6 pct from year ago
* Bleak U.S. services, factory data also hits oil
* Coming up: U.S. jobless claims, 8:30 a.m. EDT Thursday
(Recasts, updates prices and market activity)
By Gene Ramos
NEW YORK, Aug 3 (Reuters) - Oil prices fell sharply on Wednesday to the lowest level in a month, stung by an increase in U.S. petroleum inventories that raised concerns about oil demand.
Gloomy U.S. economic reports also pressured oil prices, adding to uncertainties that have weighed on prices all week.
U.S. gasoline futures led the oil complex lower after government data showed U.S. stockpiles of the fuel rose sharply last week while demand over the past four weeks fell 3.6 percent from a year ago. This stirred worries about tepid consumption during the peak summer demand period. [EIA/S]
Overall crude inventories increased as the U.S. government released more oil from the Strategic Petroleum Reserve, part of a coordinated effort with the International Energy Agency to make up for a disruption in supplies from Libya. [ID:nWEN6767]
"The EIA report was bearish with the across-the-board builds," said John Kilduff, partner for Again Capital LLC in New York.
"With increasing concern over the economy and the consumer, the four-week, year-on-year, decline in gasoline demand sticks out as another indicator of consumer weakness and possibly bodes poorly for Friday's employment data."
In London, ICE Brent crude settled at $113.23, sliding
$3.23, the lowest close since July 4's $111.39. It dropped to a
session low of $112.84, the lowest front-month Brent price
since July 6.
U.S. crude for September delivery
The contract fell below the 250-day moving average of $91.44 midday and dropped briefly below the year-end 2010 settlement price of $91.38, before paring losses as it tracked Wall Street, which turned positive in late trading. [.N]
Brent's premium against U.S. crude
Trading volume, which had been light over the past two weeks, increased, with U.S. crude rising to 612,000 contracts, nearly 3 percent above the 30-day average. In London, Brent crude volume hit almost 514,000 contracts, more than 8 percent above the 30-day average.
U.S. gasoline futures settled at $2.9313 a gallon, sliding 10.60 cents, or 3.5 percent, the lowest close for a front-month gasoline contract since June 28.
The Reuters-Jefferies CRB index <.CRB>, a 19-commodity benchmark for global commodities, dropped 1.3 percent, its largest one-day drop in six weeks, an aftermath of the day's broad markets sell-off.
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Graphic on Swiss franc vs gold:
http://link.reuters.com/syf82s
Euro zone debt crisis package:
http://r.reuters.com/hyb65p
Full coverage of U.S. budget and debt [ID:nUSBUDGET]
FACTBOX-Elements of U.S. debt compromise [ID:nN1E76T0AF]
Graphics package http:/r.reuters.com/nud82s
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U.S. GASOLINE STOCKS UP, DEMAND DIPS
U.S. gasoline inventories rose for the third straight week, up 1.7 million barrels to hit 215.2 million barrels last week. Four-week average demand, at 9.07 million barrels per day, was the lowest since the week to May 20.
Crude stockpiles at the Cushing, Oklahoma delivery point for the U.S. oil futures contract dropped to the lowest level since December, however.
Further raising demand concerns, a closely-watch index of the vast U.S. services sector unexpectedly fell in July from June, and new U.S. factory orders fell in June, reducing the the prospects of a rebound in the second half of the year. [ID:nN1E77208M]
Earlier in the day, oil shrugged off positive data showing U.S. private employers added more jobs than expected in July as analysts said the focus remained on longer-term challenges for the world's largest economy and the euro zone's troubles. [ID:nN1E77208M]
Oil prices moved along with Wall Street's broad Standard & Poor's 500 index, which dropped to a new low for the year before recovering slightly in late trading. The index is used by oil traders as an alternative guage of demand. [.N]
The dollar remained weak, falling 0.65 percent against a basket of currencies. <.DXY>
Investors are awaiting Thursday's U.S. jobless benefits claims report and Friday's key U.S. oil jobs data that is forecast to show that the economy gained 85,000 jobs in July, seen not enough to lower the unemployment rate below its current 9.2 percent. [ID:nN1E771157] (Additional reporting by Robert Gibbons and Matthew Robinson in New York; Zaida Espana in London; Alejandro Barbajosa in Singapore; Editing by Marguerita Choy and David Gregorio)