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UPDATE 6-Oil prices slide 3 pct on record U.S. crude stock build

Published 2016-11-02, 12:17 p/m
© Reuters.  UPDATE 6-Oil prices slide 3 pct on record U.S. crude stock build
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* Crude prices hit 5-week lows, WTI breaks $45 support

* EIA reports U.S. crude stocks rise of 14.4 mln bbls

* Reuters poll had forecast build of 1 mln bbls

* OPEC production seen hitting another record in Oct (New throughout, updating market activity and comments after EIA data)

By Barani Krishnan

NEW YORK, Nov 2 (Reuters) - Oil prices tumbled 3 percent on Wednesday after a record weekly build in U.S. crude inventories stoked investor worries about a global supply glut, days after analysts estimated higher monthly OPEC crude output.

The U.S. Energy Information Administration (EIA) said crude inventories rose 14.4 million barrels for the week ended Oct. 28, far more than the 1.0 billion barrels analysts had expected. It was the biggest weekly rise in U.S. crude stocks, passing a 2012 record. EIA/S

"This is very, very, very bearish. Nothing else in the report matters," said James L. Williams, energy economist at WTRG Economics in London, Arkansas.

U.S. West Texas Intermediate (WTI) crude CLc1 fell by $1.40, or 3 percent, to $45.27 a barrel by 11:48 a.m. EDT (1548 GMT). Earlier, it fell below the $45-per barrel support level, sinking to a five-week low of $44.96.

Brent LCOc1 was down $1.41, or 2.9 percent, at $46.73, after sliding to $46.50, its lowest since Sept. 28.

Oil prices had surged in recent weeks, with Brent hitting one-year highs of $53.73 and WTI 15-month peaks of $51.93 on OPEC plans to cut output. Prices retreated as some members of the producer group resisted the move.

Crude output by the Organization of the Petroleum Exporting Countries likely reached a record high of 33.82 million barrels per day (bpd) in October, a Reuters survey on Monday showed. The group meets Nov. 30, hoping to finalize output cuts. are lots of longs coming out of the market, liquidating," said Tariq Zahir, who trades long-dated WTI spreads for Tyche Capital Advisors in New York.

"I wouldn't be surprised if by the end of the week or beginning of next week, we'll get to $42 or $41 a barrel, as very few believe OPEC will make cuts that matter."

This week, two OPEC members indicated they were more keen to raise production than cut. Nigeria said its output has recovered to 2.1 million bpd while Libya has doubled its output since mid-September and is producing about 590,000 bpd. U.S. crude build came on the back of 2-million bpd jump in imports to just under 9 million bpd, the highest rate since September 2012. Prior to that, there were drawdowns in seven out of eight weeks.

"I don't think that imports will stay this high and (refinery) runs will be increasing from here," said Scott Shelton, broker and commodities specialist with ICAP (LON:IAP) in Durham, North Carolina.

"This tells me that while this is an ugly report, it's the worst we are going to see for the rest of the year."

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: Brent oil to hover above support zone of $47.13-$47.62

http://tmsnrt.rs/2ebXams GRAPHIC: U.S. oil may end downtrend around $45.24

http://tmsnrt.rs/2ebSDAG

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