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UPDATE 2-U.S. oil falls to lowest in over two months on swelling inventories

Published 13/11/2015, 03:39 pm
© Reuters.  UPDATE 2-U.S. oil falls to lowest in over two months on swelling inventories
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* WTI crude futures down over 10 pct in November

* Brent tests support at $44 per barrel

* Analysts see little chance of big price rebound this year

* Traders take bets on further price falls

* Dip in OPEC supplies lends prices some support (Adds Asia economic detail, quotes, updates chart and prices)

By Henning Gloystein

SINGAPORE, Nov 13 (Reuters) - U.S. crude fell for a third session in a row on Friday to the lowest in over two months as a relentless climb in oil stockpiles helped trigger a 10 percent drop in prices since the start of November, with traders taking on bets on further falls.

Benchmark U.S. crude futures CLc1 were at $41.52 a barrel at 0417 GMT, down 23 cents from Thursday, when prices tumbled 4 percent on the back of rising U.S. stocks. The contract was at the lowest since Aug. 27. urn:newsml:reuters.com:*:nL3N1371AH

Internationally traded Brent crude futures were at $44.10 a barrel, up four cents on their last settlement, but close to August lows. urn:newsml:reuters.com:*:nL3N1380HY

"U.S. crude inventories breaking to a new high and production inching upwards should have been the reason for the market shakedown," Singapore-based Phillip Futures said, referring to a 4.2 million barrel crude inventory rise by last week against a market expectation for a 1.3 million barrel gain.

ANZ bank said a big price rebound this year was unlikely: "A year-end recovery in commodity prices remains unlikely with a stronger US$ and EM (emerging market) growth concerns."

There are also signs that traders are preparing for more price falls this year and into 2016, with the number of options taken to sell crude futures if prices fall to $40 or even $25 per barrel between December 2015 and June 2016 soaring over the past month. urn:newsml:reuters.com:*:nL3N1381HJ

Oil markets have been dogged by oversupply, which analysts estimate to be between 0.7 and 2.5 million barrels of oil being produced a day above demand, and which has resulted in prices falling by almost two-thirds since June 2014. urn:newsml:reuters.com:*:nL3N0Z31CC

The glut is a result of high production by most major producers, including countries making up the Middle East-led Organization of the Petroleum Exporting Countries (OPEC), but also Russia and North America.

OPEC said it expects an oil surplus to extend into 2016, albeit at a lower rate than this year.

The group said it pumped 31.38 million barrels per day (bpd) last month, down 256,000 bpd from September. That is the first decline since March, according to OPEC figures. urn:newsml:reuters.com:*:nL8N1373QT

On the demand side, an economic slowdown in Asia, led by the region's two biggest economies, China and Japan, has led to concerns about slowing demand, although consumption has so far held up urn:newsml:reuters.com:*:nL3N1381B3 urn:newsml:reuters.com:*:nL3N13804N

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART-U.S. crude trading data looks bearish:

http://reut.rs/1RSgjbu

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Ed Davies and Richard Pullin)

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