LONDON/NEW YORK: Oil fell by as much as $1 on Wednesday, as negative economic data clouded the demand outlook, although losses were contained by dollar weakness, US supply disruption and violence in the Middle East. Oil had already been hit after the ADP national employment report showed that US payrolls added just 38,000 jobs in May and were the lowest since September 2010. It extended losses to slip by around $1 on the day after data showed the pace of growth in the US manufacturing sector tumbled to its slowest since September 2009, shining a spotlight on the lackluster US economy and prospects for demand there. This followed data that showed European manufacturing growth slipped sharply and Chinese factories expanded in May at their slowest pace in at least nine months By 1443 GMT US crude was 90 cents lower to $101.80 a barrel, having touched a session low of $101.61 shortly after the ISM data. Brent crude traded down 79 cents at $115.94 a barrel. The sell-off in commodities earlier in May led to Brent posting a 7.3 percent loss for the month, its biggest monthly percentage loss in a year. "The market pulled back after the ADP report, showing that if you don't have good numbers the market loses confidence, but the dollar remains weak and oil looks like it is trying to consolidate," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut On Tuesday, US consumer confidence slid in May as consumers turned more pessimistic on the outlook for the labor market and inflation worries rose, according to a private sector report released on Tuesday. Oil's price falls were limited as a weaker dollar supported commodity prices. A weaker dollar makes oil cheaper for those holding other currencies. Optimism that a deal would be done to deliver Greece a fresh aid package lifted the euro to a four-week high against the dollar. The dollar also retreated on the US ADP data. Also supporting crude prices, pipeline disruptions to US supply have hit the world's largest oil consumer just as it enters the summer driving season. TransCanada Corp said it will take several days to re-open its 591,000 barrel per day (bpd) Keystone oil pipeline to the Cushing, Oklahoma, oil hub after the second spill in less than a month forced it to shut at the weekend. Enbridge Inc restored power on Wednesday to three pumping stations on a 290,000 bpd pipeline that had lost electricity supply after severe storms. Tension in the Middle East also supported oil as investors worried about possible supply disruption. Street fighting raged in Yemen's capital on Tuesday, ending a tenuous ceasefire between tribal groups and forces loyal to President Ali Abdullah Saleh and edging the impoverished Arab state closer to civil war. Flashpoints in Yemen have multiplied this week with fighting in the capital, government troops gunning down protesters in Taiz in the south and a battle with al Qaeda and Islamic militants in the coastal city of Zinjibar. Yemen is a small independent producer but the concern for oil markets is of chaos creating a haven for al Qaeda militants, spreading to neighbor and the world's biggest oil exporter Saudi Arabia. Next week investors' attention will turn to an OPEC meeting to see whether any changes to production are on the cards from major oil producers, though a Reuters survey found that no change was likely. –Additional reporting by Seng Li Peng in Singapore
