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REFILE-Oil up on bargain-hunting, but gains capped by stockpile forecast

Published 13/10/2015, 01:09 pm
© Reuters.  REFILE-Oil up on bargain-hunting, but gains capped by stockpile forecast
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(Corrects paragraph 3 to add dropped dollar symbol)

By Meeyoung Cho

SEOUL, Oct 13 (Reuters) - Crude oil futures climbed on Tuesday, buoyed by light bargain-hunting after U.S. and Brent crude in the previous session posted their biggest daily percentage declines since the start of September.

But a supply surplus and expectations of higher crude inventory stockplies in the United States limited gains.

Global benchmark Brent crude LCOc1 had climbed 62 cents to $50.48 a barrel by 0132 GMT, after dropping $2.79 to end Monday at $49.86. U.S. crude for November CLc1 climbed 41 cents to $47.51 a barrel after settling down $2.53 at $47.10.

"We think that prices are likely to remain capped to the upside for the remainder of this quarter in line with our forecast due to weakening product demand, burgeoning crude and product stocks, and limited supply adjustments," Barclays (L:BARC) said.

Kuwait said on Monday there were no calls within OPEC to change the oil group's production policy and that lower output from high-cost producers could support prices in 2016, adding to signs OPEC will keep its strategy of defending market share. urn:newsml:reuters.com:*:nL8N12C14K

OPEC forecast on Monday that demand for its oil in 2016 would be much higher than previously thought as its strategy of letting prices fall hits U.S. shale oil and other rival supplies, reducing a global surplus. ID:nL8N12C22M

Venezuela, whose economy has been decimated by low oil prices, this month will unveil a bold new strategy to revive them, taking a page from OPEC's history books with a proposed price band to build an automatic floor for prices at $70 a barrel. urn:newsml:reuters.com:*:nL1N12C0OV

"Oil dropped the most in three weeks after OPEC reported that its members pumped the most crude in three years. U.S. crude stockpiles are also expected to rise when released later this week," ANZ said in a note on Tuesday.

A preliminary Reuters survey, taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the U.S. Department of Energy's Energy Information Administration (EIA), showed a crude stock build of 2.8 million barrels on average in the week ended Oct. 9. EIA/S

Reuters analyst Wang Tao said that U.S. oil is expected to fall to $46.44, as it has broken support at $48.13 per barrel. ID:nL3N12D131

Asian shares stepped back from two-month highs on profit-taking on Tuesday, while the dollar was on the defensive as expectations of an imminent U.S. rate hike receded. MKTS/GLOB

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