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CORRECTED-UPDATE 2-Oil futures extend gains on falling U.S. crude stocks

Published 22/03/2016, 06:03 pm
© Reuters.  CORRECTED-UPDATE 2-Oil futures extend gains on falling U.S. crude stocks
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(Corrects RIC for U.S. crude and Monday's settlement price to $41.52 in 2nd paragraph)

* Crude inventories down for first time since January

* Gains limited as markets pause for breath

By Aaron Sheldrick

TOKYO, March 22 (Reuters) - Oil prices rose in Asian trade on Tuesday, adding to gains from the previous session after data showed U.S. crude inventories fell for the first time since January and as commodity prices broadly strengthened.

U.S. crude futures for May CLK6 , the front month from Tuesday, were up 18 cents at $41.70 a barrel at 0630 GMT, after settling up 0.9 percent at $41.52 on Monday.

The previous front month contract settled at $39.91 before expiring on Monday.

Brent crude futures for May delivery LCOc1 were 17 cents higher at $41.71 a barrel after rising 0.8 percent on Monday. Brent has risen more than 50 percent from 12-year lows in January.

"Oil and a number of other markets have reached a bit of a pause phase," said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"For oil we have had a substantial rally. A lot of that has been preemptive in nature, preempting production cuts, and assisted by the weaker U.S. dollar," he said.

"We have arrived at the situation where the market is waiting for news to catch up with it a little," Spooner said.

Stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude fell 570,574 barrels to 69.05 million in the week to March 18, traders said on Monday, citing data from market intelligence firm Genscape.

Cushing inventories had previously risen toward 70 million barrels, causing market participants to fear they could hit capacity.

Iran may join other oil producers planning to freeze production to support prices at a later date, OPEC's secretary general said on Monday, as the country is seeking to raise its exports after Western sanctions were lifted in January.

Producers from the Organization of the Petroleum Exporting Countries and non-members are due to meet on April 17 in Qatar discuss the output freeze.

Iran is keen to increase its oil exports, which fell by more than half during the sanctions over Tehran's disputed nuclear programme, and has said it should not be bound by a production freeze until it can recover its market share.

"A further improvement in fundamentals will be needed for bulks, crude oil and base metals to rally further," ANZ said in a research note.

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http://graphics.thomsonreuters.com/US/2/PVB_20162203091800.png U.S. oil targets $43

http://graphics.thomsonreuters.com/US/2/PVB_20162203090958.png

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