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UPDATE 9-Oil prices fall on U.S. stock build, concerns over freeze meeting

Published 14/04/2016, 12:52 am
© Reuters.  UPDATE 9-Oil prices fall on U.S. stock build, concerns over freeze meeting
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* U.S. crude inventories up 6.6 million barrels last week -EIA

* Saudi Arabia oil minister rules out production cut -report

* Iran won't send oil minister to meeting in Doha -report

* OPEC revises its 2016 global demand forecast down

* U.S. crude stocks rise more than expected -API (Adds EIA data, comments, updates prices)

By Ahmad Ghaddar

LONDON, April 13 (Reuters) - Oil futures traded lower on Wednesday on a larger than expected build in U.S. crude inventories and on concerns that a producer meeting set for Sunday in Doha to discuss freezing output will do little to trim oversupply .

Brent crude LCOc1 was down 62 cents at $44.07 per barrel at 1439 GMT, while U.S. crude CLc1 declined by 63 cents to $41.54.

U.S. crude inventories rose 6.6 million barrels last week to 536.53 million barrels, the Energy Information Administration said on Wednesday, compared with analyst expectations of a 1.9 million barrel rise. EA/IS

But a larger than expected draw in gasoline inventories softened the blow of soaring crude stocks. Gasoline fell by 4.2 million barrels to 239.76 million, compared with an analyst forecast of a 1.4 million barrel draw.

"Even with the large build in oil stocks, everyone's focus is shifting to that summer driving season and with the gasoline drawdown of 4.24 million barrels, I would expect crude oil to continue to rally," senior market strategist at Chicago-based RJO Futures said on Wednesday.

Prices were already under pressure from comments by Saudi oil minister Ali al-Naimi in the al-Hayat newspaper in which he confirmed his country's position that an outright production cut was out of the question. about this topic," al-Naimi told the paper, when asked about any possible reduction in his country's crude output.

Iranian oil minister Bijan Zanganeh does not plan to attend the Doha meeting but Iran will be sending a representative, an Iranian journalist from the Seda weekly wrote on his Twitter account on Wednesday.

Iran has said it does not plan to participate in the freeze agreement as it seeks to boost its production in the post-sanctions era. Stanley analysts said the market may still be underestimating the potential near-term headline upside risk of the Sunday meeting.

"A deal not only seems likely - as leaks and prior announcements have suggested - but confirmation of the deal, greater clarity about the freeze or hints of further OPEC action could reinforce the bullish sentiment," the bank said on Wednesday.

The Organization of the Petroleum Exporting Countries lowered its forecast of world oil demand growth by 50,000 barrels per day (bpd) and said in its monthly report on Wednesday further downward revisions could follow. pumped 32.25 million bpd in March, the group said citing secondary sources, up about 15,000 bpd from February.

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http://graphics.thomsonreuters.com/US/2/PVB_20161304091501.png U.S. crude oil outlook chart

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