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UPDATE 5-Oil prices fall on bloated U.S. fuel inventories, stalling China demand

Published 09/02/2017, 02:19 am
© Reuters.  UPDATE 5-Oil prices fall on bloated U.S. fuel inventories, stalling China demand
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* U.S. crude oil, gasoline inventories soar as demand stalls

* Chinese oil demand growth falters

* Market can accommodate rising shale -Qatar minister (Updates prices)

By Ahmad Ghaddar

LONDON, Feb 8 (Reuters) - Oil prices slid on Wednesday, extending falls from the previous session, as a big increase in U.S. crude inventories and a slump in Chinese demand implied too much global supply despite OPEC-led efforts to cut output.

International Brent crude futures LCOc1 were trading at $54.69 per barrel at 1501 GMT, down 36 cents from their previous close.

U.S. West Texas Intermediate (WTI) crude CLc1 was at $51.71 a barrel, down 46 cents.

The declines came on the back of unexpectedly big increases in U.S. fuel inventories, as reported by the American Petroleum Institute (API) on Tuesday. API/S

Crude inventories rose by 14.2 million barrels in the week to February 3 to 503.6 million barrels, compared with analysts' expectations in a Reuters poll for a 2.5 million barrel increase.

"If the official data from the U.S. Department of Energy were to show a similar inventory build ... U.S. crude oil stocks would be catapulted to almost a record level," Commerzbank (DE:CBKG) said in a note.

The U.S. Energy Information Administration publishes its official data later on Wednesday.

Gasoline stocks rose by 2.9 million barrels, compared with expectations for a 1.1-million-barrel gain.

Goldman Sachs (NYSE:GS) analysts said that the data pointed to "U.S. gasoline demand falling sharply by 460,000 barrels per day (bpd) year on year in January, with such declines only previously (seen) during recessions."

The EIA said on Tuesday it expects U.S. crude production to grow by 100,000 bpd to 8.98 million barrels this year, 0.3 percent less than previously forecast, but expects production to jump by 550,000 bpd in 2018. U.S. supplies undermine a deal led by the Organization of the Petroleum Exporting Countries (OPEC) to curb output and support prices.

But OPEC, for the time being at least, is not greatly concerned with rising U.S. output.

"The market is gradually accommodating for shale oil as well as shale gas - the demand is healthy. With that continuous demand increase I think all available oils are going to be accommodated," Qatari Energy Minister Mohammed al-Sada told Reuters on Wednesday. also came under pressure from signs of slowing demand from the world's biggest energy consumer.

China's 2016 oil demand grew at its slowest pace in at least three years, Reuters calculations based on official data showed.

China's implied oil demand growth eased to 2.5 percent in 2016, down from 3.1 percent in 2015 and 3.8 percent in 2014, led by a sharp drop in diesel consumption and as gasoline usage eased from double-digit growth. GRAPHIC-OPEC vs U.S. oil production

http://tmsnrt.rs/2kPMpyh GRAPHIC-Global oil supply vs demand

http://tmsnrt.rs/2jUJLWm

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