UPDATE 7-Oil prices rise over 4% on positive economic data from China

* Survey finds expansion of China's services sector
* U.S. manufacturing contracted in August - data
* Trump warns he will be tougher on Beijing if trade talks
drag
* Iran set to release crew of detained tanker
* Coming up: U.S. weekly oil inventory data from API (2030
GMT)

(Adds closing prices)
By Scott DiSavino
NEW YORK, Sept 4 (Reuters) - Oil prices rose more than 4% on
Wednesday, boosted by a wider market pickup on positive news
from China, after three days of losses due to fears about a
weakening global economy.
Brent futures LCOc1 rose $2.44, or 4.2%, to settle at
$60.70 a barrel, while U.S. West Texas Intermediate (WTI) crude
CLc1 gained $2.32, or 4.3%, to $56.26.
That was the biggest daily percentage increase for WTI since
July 10.
Stock indexes worldwide rebounded as easing geopolitical
concerns and upbeat economic data from China brought buyers back
to the equities market. MKTS/GLOB
A private survey showed that activity in China's services
sector expanded at the fastest pace in three months in August as
new orders rose, prompting the biggest increase in hiring in
more than a year. In addition, investor risk appetite was further revived
after Hong Kong withdrew the contentious extradition bill at the
heart of recent protests.
China is the world's second-largest oil consumer and largest
importer.
In the United States, crude stockpiles were expected to have
declined for a third straight week, a Reuters poll showed, ahead
of weekly data from the American Petroleum Institute (API) on
Wednesday and the government on Thursday. Both reports are
delayed a day due to the U.S. Labor Day holiday. EIA/S
Some analysts, however, noted overall fundamentals of the
oil market remained discouraging.
"Oil prices however remain focused on the trade war and the
longer we don't see a date scheduled for a face-to-face meeting
between Chinese and U.S. officials, the greater the odds we
could see a retest of the summer lows," Edward Moya, senior
market analyst at OANDA in New York, said in a report.
U.S. President Donald Trump warned on Tuesday he would be
"tougher" on Beijing in a second term if trade talks dragged on,
compounding market fears that trade disputes between the two
countries could trigger a U.S. recession. U.S. data released on Tuesday showed manufacturing activity
contracted in August for the first time in three years, while
euro zone activity shrank for a seventh month. "Crude oil remains troubled by reports that production from
OPEC, Russia and the U.S. all rose last month. This (comes) at a
time when the strength of demand growth, due to trade war
pessimism, has increasingly been called into question," Saxo
Bank commodity strategist Ole Hansen said.
BP Plc's BP.L Chief Financial Officer Brian Gilvary told
Reuters that global oil demand is expected to grow by less than
1 million barrels per day (bpd) in 2019 as consumption slows.
But supply looks set to stay constrained as Russian
officials and sources from the Organization of the Petroleum
Exporting Countries indicated the countries would remain
committed to their agreement to rein in production despite a
shake-up in Saudi Arabia's oil industry. In a possible sign of tension easing in the energy-rich
Gulf, Iranian state television reported on Wednesday that Tehran
would free seven crew members of the detained British-flagged
tanker Stena Impero.
The vessel was seized two weeks after Britain detained an
Iranian tanker off the territory of Gibraltar which was released
in August.