* Partial outage at Colonial Pipeline helps pare losses
* Oil weighed down earlier in session by Wall Street's
tumble
* Bets on lower U.S. crude inventories also support oil
* Coming Up: API data on U.S. crude inventories, 2030 GMT
(New throughout, with market's rebound in pre-settlement trade)
By Barani Krishnan
NEW YORK, Sept 22 (Reuters) - Brent settled up while U.S.
crude finished down 2 percent but off its lows after a partial
pipeline outage and bets of positive U.S. inventory data helped
oil offset some of Tuesday's skittish sentiment caused by weak
Wall Street stocks.
Traders also took in their stride early market jitters from
the impending expiry of the front-month contract in U.S. crude
and a near two-week high in the dollar. USD/
Brent futures fell more than 2 percent earlier on Tuesday
and U.S. crude tumbled over 3 percent as U.S. equity markets
slumped to a two-week low. Gasoline futures also lost more than
3 percent before turning positive.
The rebound came after news that Colonial Pipeline had shut
part of its operation, including a line with a 850,000-barrels
capacity to carry both gasoline and distillates from North
Carolina to its New Jersey hub. Colonial said the shutdown was
to investigate "odors of gasoline."
"Products futures were up on the Colonial Pipeline news and
Brent crude responded and turned higher probably because the
Colonial news might mean more product needed from Europe," said
Phil Flynn, analyst at Price Futures Group in Chicago.
Brent's front-month contract, November LCOc1 , settled up
16 cents, or 0.3 percent, at $49.08 a barrel.
U.S. crude's October contract settled down 85 cents, or 1.8
percent, at $45.83 before expiring as the front month CLV5 .
The nearby November contract CLX5 , settled down 60 cents at
$46.46.
Losses in U.S. crude were also limited though by a Reuters
survey showing U.S. crude inventories had fallen almost a
million barrels last week, following through with the previous
week's decline of 2.1 million barrels. EIA/S
Traders and investors will get more oil inventory data from
industry group the American Petroleum Institute at 4:30 p.m. EDT
(2030 GMT). Official stockpile figures are due Wednesday from
the U.S. Energy Information Administration.