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UPDATE 5-Oil falls on higher U.S. crude inventories, strong dollar

Published 16/11/2016, 11:27 pm
© Reuters.  UPDATE 5-Oil falls on higher U.S. crude inventories, strong dollar
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* U.S. crude stocks rose 3.6 mln barrels last week - API

* Dollar index hits 14-year high

* Some OPEC members likely to meet in Doha on Friday - source

* ABN Amro lowers Q4 oil price forecasts to $50/barrel (Adds dollar moves, IEA comments, updates prices)

By Karolin Schaps

LONDON, Nov 16 (Reuters) - Oil prices shed more than one percent on Wednesday, returning some of the gains made in one of the year's biggest rallies a day earlier, after weekly U.S. crude stocks rose beyond expectations and a strong dollar weighed on commodities.

Global benchmark Brent crude LCOc1 was down 53 cents at $46.42 a barrel at 1217 GMT. It closed Tuesday 5.7 percent higher on news that members of the Organization of the Petroleum Exporting Countries would renew efforts to limit production.

U.S. crude CLc1 was 63 cents lower at $45.18 a barrel.

"Prices are down on the build in U.S. crude oil stocks reported by the API last night," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

A strong dollar also weighed on oil, with the index measured against a basket of currencies .DXY hitting a 14-year high.

Weekly U.S. crude oil stocks surged by 3.6 million barrels last week, the American Petroleum Institute (API) industry group said, exceeding analyst expectations of a 1.5-million-barrel rise. API/S

The news dampened a rally infused by news that OPEC members were meeting ahead of an official group gathering on Nov. 30 to build consensus for a deal to limit output, and by oil pipeline attacks by militants in Nigeria. number of energy ministers from OPEC countries are likely to meet informally in Doha on Friday to try to build consensus over decisions taken by the full group in September in Algiers, an Algerian energy source said. estimate the possibility of an actual OPEC production cut as 50-50," said Hans van Cleef, senior energy economist at ABN Amro.

"If OPEC would stick to its intention to set its production ceiling at 32.5 million barrels a day, or even lower, market optimism will likely pick up, which could be supportive for oil prices."

The Dutch bank lowered its oil price forecasts on Wednesday, expecting Brent and U.S. crude to average $50 a barrel in the fourth quarter.

In a bullish signal for the oil market, the International Energy Agency (IEA) said on Wednesday oil consumption will peak no sooner than 2040 despite the entering into force of the Paris climate deal which intends to wean the world off fossil fuels by the end of the century. GRAPHIC - WTI technical analysis

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