* China set to tap state oil reserves for the first time
* Prices supported by lower U.S. output after Hurricane Ida
* Shell declares force majeure on some oil deliveries after
Ida
* EIA data shows U.S. crude drawdown less than poll
expectations
* EIA data shows U.S. gasoline drawdown more than
expectations
* EIA cuts 2021 demand outlook, keeps 2022 forecast steady
(New throughout, updates prices, market activity and comments,
adds Shell force majeure)
By Scott DiSavino
NEW YORK, Sept 9 (Reuters) - Oil prices eased on Thursday on
China's plan to release state oil reserves to reduce pressure on
domestic refiners and a smaller than expected U.S. weekly crude
draw.
Traders said losses were limited by the slow return of U.S.
output after Hurricane Ida and higher than expected U.S.
gasoline demand.
Brent futures fell 27 cents, or 0.4%, to $72.33 a
barrel by 12:38 p.m. EDT (1638 GMT). U.S. West Texas
Intermediate (WTI) crude fell 29 cents, or 0.4%, to
$69.01.
China's state reserves administration said it would release
crude reserves to the market in phases via public auction to
ease pressure of high costs on domestic refiners.
"The oil market is in deficit but this China story could
disrupt it staying in deficit for the rest of the year," said
Edward Moya, senior market analyst at OANDA.
The U.S. Energy Information Administration (EIA) said crude
stockpiles declined just 1.5 million barrels in the week to
Sept. 3, much less than the 4.6-million barrel draw analysts
forecast in a Reuters poll.
The much bigger than expected 7.2 million barrel drop in
weekly gasoline inventories supported oil prices. Analysts
forecast gasoline stocks would decline by just 3.4 million
barrels last week.
"The gasoline demand number is sky high and that has been
the pattern all season," said John Kilduff, partner at Again
Capital LLC in New York, noting "These are unbelievable numbers
for this time of year."
U.S. production, meanwhile, fell from 11.5 million barrels
per day (bpd) in the week to Aug. 27 to 10.0 million bpd during
the week ended Sept. 3 due to ongoing output declines in the
Gulf of Mexico area from Hurricane Ida.
Royal Dutch Shell Plc declared force majeure on
several contracts due to damage to offshore facilities in the
Gulf of Mexico after Ida.
The Gulf's offshore wells account for about 17% of U.S.
output. Some 1.4 million bpd of crude production was still
shut-in.
Prices were also pressured by the EIA on Wednesday cutting
its 2021 global oil demand growth forecast.
In other U.S. news, the number of Americans filing new
claims for jobless benefits fell last week to the lowest level
in nearly 18 months, more evidence of labor shortages.
With U.S. COVID-19 cases surging among the unvaccinated,
President Joe Biden will outline new approaches to control the
pandemic in a speech on Thursday, including a requirement that
all federal employees get vaccinated.
(Additional reporting by Noah Browning in London, Naveen
Thukral in Singapore and Laura Sanicola in New York; Editing by
David Goodman, Mark Potter and David Gregorio)
