* China factory PMI falls to 6-1/2-year low
* Weakening Chinese economy to hit global oil demand
* U.S. crude inventories fall 3.7 mln barrels - API
* Coming Up: U.S. EIA oil data at 10:30 a.m. EDT (1430 GMT)
(Updates prices paragraph 4)
By Christopher Johnson
LONDON, Sept 23 (Reuters) - Brent crude oil rose towards $50
a barrel on Wednesday as a drawdown in U.S. crude oil stocks
outweighed the negative impact of weak economic manufacturing
data from China.
The American Petroleum Institute (API) said U.S. crude
stockpiles fell 3.7 million barrels last week, with stocks at
the Cushing, Oklahoma, delivery point for U.S. crude futures
down almost 500,000 barrels. API/S
Although total U.S. oil inventories are at record highs, the
draw suggests a rebalancing of the biggest domestic oil market
is under way as oil production slows in the face of low prices.
Benchmark Brent for November LOCc1 was up 50 cents a
barrel at $49.58 by 1410 GMT. U.S. light crude for November
CLc1 traded up 30 cents at $46.66.
The U.S. industry data helped oil resist the negative impact
of a sharp contraction in Chinese manufacturing, which darkened
the outlook for the world economy. ID:nL4N11T2OW
Flagging demand is dragging China's factory sector into its
sharpest contraction in 6-1/2 years, a private survey showed on
Wednesday, triggering a flight to safety in Asian markets that
analysts say could extend across the globe.
The preliminary Caixin/Markit China Manufacturing Purchasing
Managers' Index fell to 47.0 in September, its lowest since
March 2009. Levels below 50 show a contraction. ID:nL4N11T1QA
Oil prices have been weak for over a year and are now less
than half their peak levels in 2014 thanks to massive oversupply
by oil producers in the Middle East and North America.
Some analysts say oil prices could be about to recover,
particularly if official U.S. government figures confirm that
the oil market there is starting to tighten.
The U.S. Energy Information Administration will publish its
figures at 10:30 a.m. EDT (1430 GMT) on Wednesday. EIA/S
"If the EIA confirms the crude draw this afternoon, the
market could go even higher," said Tamas Varga, analyst at
London brokerage PVM Oil Associates. "It is now not unreasonable
to expect higher prices."
Investors remain worried about China.
"China's economic slowdown continues, with factory output
and investment growth both failing to hit targets," oil
consultancy Energy Aspects said.
"With the economy showing little sign of recovery, the 7
percent GDP growth target set by the government may prove
difficult to achieve," it added.
Energy Aspects said it expected global crude demand for the
second half of the year to grow at only 1 million barrels per
day (bpd), down from almost 2 million bpd in the first half.