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UPDATE 8-Oil drops to 3-month low, U.S. erases all gains since OPEC output cut

Published 2017-03-14, 03:20 p/m
© Reuters.  UPDATE 8-Oil drops to 3-month low, U.S. erases all gains since OPEC output cut
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* Global production gains offset OPEC demand growth forecast

* Brent premium over WTI highest since January

* Forecasters see 10th weekly rise in U.S. crude inventories

* Coming Up: API crude stockpile data 4:30 pm ET/2030 GMT (New throughout, updates prices and market activity to settlement)

By Scott DiSavino

NEW YORK, March 14 (Reuters) - Oil tumbled on Tuesday after OPEC reported a rise in global crude stocks and a surprise output jump from its biggest member, Saudi Arabia, further pressuring prices that have now erased nearly all gains since OPEC announced output cuts in November.

Even though OPEC made an upward revision to its global demand outlook, signs of even modestly higher Saudi output flustered investors.

U.S. crude fell to its lowest settlement since Nov. 29, the day before the Saudi kingdom led the Organization of the Petroleum Exporting Countries (OPEC) to cut supplies. Brent settled at its lowest since Nov. 30. LCOc1 futures dropped below their 200-day moving average for the first time since late November during the session. Brent settled down 43 cents, or 0.8 percent, at $50.92 a barrel.

U.S. West Texas Intermediate crude CLc1 lost 68 cents, or 1.4 percent, to settle at $47.72 per barrel for the seventh daily decline in a row, the longest losing streak since January 2016. It is down almost 11 percent since March 3.

On technical charts, Brent and WTI both remained in oversold territory for a fifth day in a row, their longest such streaks since November.

The Brent front-month premium over the corresponding U.S. contract WTCLc1-LCOc1 rose to its highest since late January.

Secondary sources had said Saudi output fell in February to 9.797 million barrels per day (bpd), but Riyadh told OPEC it rose to 10.011 million bpd.

In an effort to dispel market concerns, the Saudi energy ministry said the "difference between what the market observes as production, and the actual supply levels in any given month, is due to operational factors that are influenced by storage adjustments and other month to month variables." monthly report said oil stocks in industrialised nations rose in January to 278 million barrels above the five-year average, with U.S. shale and other non-OPEC supply gaining.

"Oil prices have come under renewed pressure after the latest OPEC report showed a rise in global crude inventory despite the cartel deciding to curtail its output," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London.

This week's data is expected to show another rise in U.S. inventories after last week's bigger-than-expected increase. EIA/S

It would be the 10th consecutive weekly increase in U.S. crude stocks, boosting total inventories, including strategic reserves, further past the 1.22 billion barrel record hit during the week ended March 3.

The American Petroleum Institute reports its stockpile data on Tuesday afternoon at 4:30 p.m EDT ahead of official U.S. government data Wednesday morning.

Saudi Arabia, the world's biggest oil exporter, has yet to indicate clearly whether it is ready to extend supply curbs.

On Monday, Kuwait said it would support an extension of the global deal.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: Brent oil neutral in $50.84-$51.54 range

http://tmsnrt.rs/2nhAGJU GRAPHIC: U.S. oil neutral in $48.15-$48.68 range

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