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UPDATE 9-Oil falls a second day on large U.S. crude stock build

Published 03/09/2015, 02:49 am
© Reuters.  UPDATE 9-Oil falls a second day on large U.S. crude stock build
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* U.S. crude stocks up 4.7 mln barrels - EIA

* Obama administration has votes to secure Iran nuclear agreement

* Shell (LONDON:RDSa) lifts force majeure on Nigerian Bonny Light exports (Rewrites throughout, updates prices, changes byline, moves dateline from previous LONDON)

By Robert Gibbons

NEW YORK, Sept 2 (Reuters) - Oil prices fell a second day on Wednesday after government data showing U.S. crude stockpiles rose last week added to concerns about global oversupply and sluggish economic growth in China.

After a frenzied short-covering fueled a 25 percent three-session surge that ended on Monday, the two sessions of losses have extended the turbulent run that saw oil slide to 6-1/2-year lows last week.

U.S. crude oil stocks rose 4.7 million barrels to 455.4 million barrels last week, the Energy Information Administration (EIA) said. EIA/S

"While there is some seasonality to crude beginning to build at this time of the year, a four-plus-million-barrel build is bearish and larger than normal," said Scott Shelton, commodities specialist with ICAP (LONDON:IAP) in Durham, North Carolina.

Analysts in a Reuters poll had expected U.S. crude stocks to have remained flat last week and the EIA report followed Tuesday's report from American Petroleum Institute (API) showing crude stocks rose 7.6 million barrels to 456.9 million. API/S

Brent October crude LCOc1 was down $1.60 at $47.96 a barrel at 12:19 p.m. EDT (1619 GMT), having swung from $47.74 to $50.79.

U.S. October crude CLc1 was down $1.95 at $43.46, having traded as low as $43.21 after reaching $46.32.

Crude futures extended losses on news that Shell's RSDa.L Nigerian unit has lifted force majeure on Bonny Light exports following the repair and re-opening of the Trans Niger Pipeline (TNP) and Nembe Creek Trunkline (NCTL). ID:nWNAB086KS

Also adding pressure was news that President Barack Obama has the backing of enough Senate votes to sustain a veto of any congressional resolution blocking Iran's agreement on its nuclear program with world powers. ID:nL1N1180ZN

Implementing the agreement will allow a sharp increase Iran's oil exports now curbed by sanctions. ID:nL1N1180ZN

Crude oil received some support ahead of the EIA report from strong U.S. RBOB gasoline futures RBc1 , supported by news that a reformer unit at Philadelphia Energy Solutions' PESC.N Philadelphia refinery complex was shut on Tuesday due to small fire, although it was being restarted on Wednesday. ID:nWNAB086C6

EIA data showed gasoline inventories fell 271,000 barrels, much less than the 1.3 million-barrel slide expected by analysts.

"The report is mixed in that it is bearish for crude oil, but somewhat supportive of refined products," John Kilduff, partner at Again Capital LLC in New York, said.

"Crude oil imports rebounded markedly and refinery utilization fell again, allowing for the substantial crude oil inventory rise," he said.

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