Brent Crude Slips Below US$97

Brent crude fell for a third day on Wednesday, slipping further below $97 a barrel as inflated supplies and weak economic data from Europe outweighed rising geopolitical tensions in the Middle East.

* Fall in Brent defies heightened political tensions
* U.S. carries out strikes on militants in Syria
* But focus is on heavy supplies, weak data (Updates prices)

The European economic data and a rise in oil exports from Iraq and Nigeria overshadowed a boost from China with Tuesday's release of a better-than-expected flash Purchasing Managers' Index (PMI) for September. U.S. air strikes on militants in Syria also failed to lift prices.

Brent for November delivery slipped 1 cent to $96.84 a barrel by 0704 GMT, although U.S. crude rose 29 cents to $91.85 a barrel.

"Oil prices did not really gather the support coming from China's manufacturing data from yesterday as softer European manufacturing data followed," said Ben Le Brun, a market analyst at OptionsXpress in Sydney.

The European Central Bank faces an uphill task to spur growth as euro zone business activity expanded at a slightly weaker pace than expected in September as firms cut prices for the 30th month in a row, a survey showed on Tuesday.

Manufacturing and services output in the bloc's top two economies, Germany and France, has also slowed.
August crude inventories in China, excluding strategic reserves, were higher than the previous month.

China's 2015 economic growth, however, is expected to be "well above" 7 percent, according to the International Monetary Fund on Wednesday.

But for now, oil prices are under pressure and even U.S. manufacturing activity, which held near a 4-1/2-year high this month, and tensions in the Middle East have failed to turn the market around.

The United States and Arab allies bombed militant groups in Syria for the first time on Tuesday, killing scores of Islamic State fighters.

"We've got some push-pull factors working in the market at the moment," said Le Brun at OptionsXpress, referring to geopolitical tensions and ample supplies. "The major point is that the market is very well supplied."
Iraq and Nigeria are stepping up exports, adding even more oil to the market, while output in Libya has rebounded.

Libya is producing 800,000 barrels per day (bpd), up about 14 percent from Sunday, after the El Sharara oil field restarted production.

Exports from Iraq's southern terminals have averaged 2.58 million bpd, according to shipping data for the first 23 days of September tracked by Reuters, up from August's average of 2.38 million.

Nigeria's oil exports are expected to hit a 14-month high in November, adding more light, sweet crude oil to an already well-supplied market.

U.S. OIL PRICE RISE SEEN SHORT-LIVED
In the United States, investors were waiting for weekly oil inventories data from the Energy Information Administration later on Wednesday for indications about demand in the world's largest oil consumer.

Crude inventories fell by 6.5 million barrels in the week to Sept. 19, data from industry group the American Petroleum Institute showed on Tuesday. Analysts in a Reuters poll were expecting inventories to have risen by 400,000 barrels. But any long-term rise in prices for U.S. oil is unlikely.

"Crude prices rose likely due to price corrections as WTI Nov 14 remained lower than Sep 14 when the Sep 14 contract closed," Phillip Futures said in a note. "The overall signal for WTI is still on its bearish trend. We do not expect this rise in prices to continue," it added.

By Seng Li Peng