By Manash Goswami
SINGAPORE (Reuters) - Brent futures fell towards $108 a barrel on Wednesday as demand growth concerns at the world's two biggest oil consumers overshadowed fears of supply disruption with geopolitical tensions over Ukraine worsening.
U.S. benchmark WTI dropped below the crucial $100 a barrel mark for a second day on expectations U.S. crude inventories rose higher than forecast, indicating a slowdown in demand as the weather improved.
Investors are now awaiting fresh economic data from China to gauge the country's oil consumption outlook after surprisingly weak trade numbers.
Brent crude lost 19 cents to $108.36 a barrel by 0301 GMT, after ending 47 cents higher. U.S. oil declined 47 cents to $99.56, after settling down $1.09 at $100.03, its lowest since February 11.
"The question in everybody's mind is - what is the biggest risk to oil? And it is China slowing down," said Jonathan Barratt, chief executive of commodity research firm Barratt's Bulletin in Sydney.
"People have figured out that what happens in Ukraine doesn't matter to oil markets so much. It may impact other commodities, but not so much oil."
Markets are awaiting a slew of data from China on Thursday, including industrial output, retail sales and urban investment to get some clarity on where the economy is heading.
China's economic uncertainty is weighing across risk assets such as Asian shares, with industrial commodities, particularly copper and iron ore, the hardest hit.
Given the amount of data that is due, it is difficult to clearly point to a direction for oil markets, Barratt said. For a longer term outlook, oil above $100 a barrel is expensive and cheap at around the $85 mark, he said.
Still, concerns over the unfolding crisis in Ukraine worsening is holding oil from sliding further as markets worry about an escalation in tensions.
Ukraine's government appealed for Western help on Tuesday to stop Moscow annexing Crimea but the Black Sea peninsula, overrun by Russian troops, seemed fixed on a course that could formalise rule from Moscow within days.
U.S. INVENTORIES
U.S. crude inventories rose by 2.6 million barrels in the week to March 7 to 367 million, data from industry group the American Petroleum Institute showed, compared with analysts' expectations for an increase of 2.2 million barrels.
Refinery shutdowns for scheduled maintenance after meeting peak winter demand may have partly helped in boosting crude stockpiles. Refinery crude runs fell by 24,000 barrels per day, the data showed.
Gasoline stocks fell by 2.2 million barrels, compared with expectations of a 2-million-barrel decline. Distillate fuels stockpiles, which include diesel and heating oil, fell by 839,000 barrels, compared with expectations for a 900,000-barrel drop, the API data showed.
Investors are now awaiting data from the U.S. Energy Information Administration (EIA) to get a clearer picture on the country's oil demand outlook.
(Editing by Muralikumar Anantharaman)
