Brent oil hits lowest since August; dollar dips

By Caroline Valetkevitch

NEW YORK (Reuters) - Brent crude oil prices hit their lowest since late August on Wednesday on worries about growing U.S. stockpiles, while the U.S. dollar took a breather from recent gains.

U.S. stocks were mostly lower in choppy trading, with the drop in oil prices weighing on energy shares. European shares ended up 0.7 percent.

Copper prices traded higher after nearing a six-year low on mixed Chinese data which showed growth in the world's second-biggest economy was still in low gear.

Oil prices fell as traders awaited government data, expected to show another weekly build in U.S. crude stockpiles. The Energy Information Administration will issue official inventory data on Thursday, a day later than usual due to the Veterans Day holiday on Wednesday.

Brent fell $1.63 to settle at $45.81 a barrel, while U.S. crude fell $1.28 to settle at $42.93.

The dollar, which had been on a charge since strong U.S. jobs data last week boosted the probability of a Federal Reserve interest rate hike next month, slid against most major currencies.

"The moves today look technical more than anything, but there is some dollar weakness," said Ulrich Leuchtmann, head of FX research at Commerzbank in Frankfurt.

The U.S. bond market was closed for Veterans Day, adding to the day's muted trading in other U.S. markets.

The dollar index was down 0.3 percent to 98.969 after touching its highest in seven months on Tuesday.

The euro gained 0.25 percent against the dollar after comments by European Central Bank President Mario Draghi at the Bank of England Open Forum, even though he did not address monetary policy.

Gains in technology shares, including Microsoft , helped to offset losses in U.S. stocks.

The Dow Jones industrial average fell 26.23 points, or 0.15 percent, to 17,731.98, the S&P 500 lost 2.7 points, or 0.13 percent, to 2,079.02 and the Nasdaq Composite dropped 1.01 points, or 0.02 percent, to 5,082.23.

It was the second straight day of what investors described as largely directionless trading.

MSCI's all-country world index was up 0.2 percent, while European shares closed up 0.7 percent after well-received earnings reports from companies including Henkel .

CHINA DATA HITS METALS

China's October industrial production growth cooled to 5.6 percent year-on-year, slightly lower than the 5.8 percent gain economists polled by Reuters had expected, though it was cushioned by a just-above-forecast 11 percent jump in retail sales.

China's growth-hungry economy is the world's biggest consumer of copper , which hit its lowest since mid-2009 at $4,914 a tonne. It was last up at $4,943. Zinc and lead, two other industrial metals, hit multi-year lows as well.

At the same time, the Baltic Exchange's main sea freight index <.BADI>, which tracks rates for ships carrying dry bulk commodities, continued to slip, falling 3.7 percent.

"China's recovery is slow. It's really affecting all the base metals," said analyst Helen Lau of broker Argonaut Securities in Hong Kong.

(Additional reporting by Dion Rabouin in New York, Marc Jones in London, Wayne Cole in Sydney and Nichola Saminather in Singapore; Editing by Nick Zieminski and James Dalgleish)