Oil falls after industry report shows surge in U.S. crude stocks

By Keith Wallis
SINGAPORE, Oct 21 (Reuters) - Oil prices fell on Wednesday
after data from an industry group showed a larger-than-expected
build in U.S. crude inventories last week, fanning worries over
global oversupply, even as a slightly weaker dollar provided
some support.
Brent crude for December delivery LCOc1 had fallen 16
cents to $48.55 a barrel by 0144 GMT after settling up 10 cents
in the previous session.
U.S. crude CLc1 for December delivery dropped 36 cents at
$45.93 a barrel after settling up one cent at $46.29. The
November contract, which expired on Tuesday, finished down 34
cents at $45.55 per barrel.
"Concerns over the potential for a further build (in U.S.
crude stocks) in official data (were driving prices lower)",
said Michael McCarthy, chief market strategist at Sydney's CMC
Markets.
"The low volumes and market moves are reflecting that," he
said.
Industry data showed U.S. commercial crude stocks climbed by
a larger-than-expected 7.1 million barrels to 473 million in the
week to Oct. 16, the American Petroleum Institute said on
Tuesday. Analysts had expected a 3.9 million barrels increase.

The U.S. Energy Information Administration is due to release
official inventory data later on Wednesday, which is expected to
show a build in crude stocks for the fourth straight week.
It was a surprise crude stocks had continued to climb even
as the number of rigs had fallen, from about 800 sixth months
ago to 600 now, McCarthy said. RIG/U
"Clearly this is not helping the oil bulls," he said.
Investors are also eyeing the outcome of an oil experts
meeting later on Wednesday involving members of the Organisation
of the Petroleum Exporting Countries and non-OPEC oil producers.
With ex-Soviet oil producers, including Russia and
Azerbaijan, unlikely to bow to pressure to reduce output in an
effort to lift prices there is little chance of a deal between
the two sides, industry experts said.
The dollar index slipped against a basket of currencies
which helped support oil prices.
A weaker dollar makes dollar-denominated commodities,
including oil, cheaper for buyers using other currencies.