Brent Pulls Away from 16-month Low

 Brent crude rose towards $101 a barrel on Wednesday, pulling away from a 16-month low hit in the previous session, supported by encouraging U.S. manufacturing data.

* U.S. manufacturing activity near 3-1/2-year high
* Buzzard oilfield may be shut for another week
* Strong dollar weighs on oil prices
* Coming up: API weekly oil stock report at 2030 GMT

day before on a stronger dollar and the prospect of slowing oil demand growth in China and Europe.
U.S. manufacturing activity hit a nearly 3-1/2-year high last month and construction spending rebounded strongly in July, data showed, raising hopes of higher oil demand in the world's biggest consumer of the commodity.

"The weak factory data in China and Europe led to concerns over demand destruction, and that's why prices dropped," said Avtar Sandu, a senior commodities manager at Phillip Futures in Singapore.

"The oil market is mainly driven by the demand side now. We don't see many issues on the supply side, and at the moment investors are hardly paying any attention to all the geopolitical events going on," he said.

Brent crude for October delivery was up 48 cents at $100.82 a barrel by 0651 GMT, after closing down $2.45 at its lowest settlement since May 1, 2013.

U.S. crude was trading 43 cents higher at $93.31 a barrel. The contract had settled $3.08 lower than Friday's close, the lowest since Jan. 14. There was no trading in the United States on Monday because of the Labor Day holiday.

A stronger dollar weighed on oil prices, after the currency rose to its highest since July 2013 against a basket of major currencies on Tuesday. A stronger greenback makes it more expensive for oil importing countries to buy the dollar-denominated commodity.

A prolonged shutdown of the Buzzard oilfield in the North Sea could help to ease a glut of crude that has built in the Atlantic basin. The 200,000 barrel-per-day field may be shut for "up to 10 consecutive days" starting from Aug. 30 when output was last stopped, Calgary-based Nexen said on Tuesday.

Buzzard is closely watched by oil traders worldwide as it is the biggest contributor to the Forties oil stream, the largest of the four physical crude grades that underpin the Brent benchmark.
U.S. crude oil and refined product stockpiles were forecast to have dropped in the week to Aug. 29, with crude oil stocks projected to have fallen by 1 million barrels, a preliminary Reuters survey of seven analysts showed on Tuesday.

By Jacob Gronholt-Pedersen