US crude pares gain, then rises $2 after oil data

NEW YORK, Sept 1 (Reuters) - U.S. crude oil futures prices seesawed, initially paring gains and then bouncing up more than $2 on Wednesday, as the market digested government oil inventory data showing crude oil inventories rose more than expected last week.

Strong economic data from China, strong equities and a weak dollar had already pushed oil up more than $1 after crude prices slumped more than 3 percent in the previous session.

U.S. Energy Information Administration data showed crude oil stockpiles rose 3.43 million barrels last week, more than expected. [EIA/S]

Gasoline stocks fell, in line with expectations, and distillate stockpiles fell against a forecast for a rise, the EIA said.

On the New York Mercantile Exchange, October crude <CLV0> rose $1.99, or 2.77 percent, to $73.91 a barrel by 10:39 a.m. EDT (1439 GMT), trading from $71.67 to $74.07. Prices were up about $1.70 when the EIA data arrived. (Reporting by Robert Gibbons)