RPT-U.S. crude oil prices hover just above $40 on stockpile rise

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By Swetha Gopinath
Dec 3 (Reuters) - U.S. crude prices were hovering just above
$40 in early Asian trading on Thursday, after dropping more than
4 percent a day earlier, on an unexpected rise in U.S.
stockpiles that is compounding a global supply glut.
U.S. crude CLc1 was trading at $40.23 per barrel at 0005
GMT on Thursday, up 29 cents from its last settlement, but down
nearly 14 percent since the start of November.
Crude inventories USOILC=ECI rose for the tenth straight
week, climbing 1.2 million barrels in the week to Nov. 27 in
contrast to analysts' expectations of a decrease of 471,000
barrels, data from the U.S. Energy Information Administration
showed on Wednesday.
"The market was expecting a modest rundown in U.S. crude oil
inventories last week, but API and EIA have reported rises of
1.64 and 1.18 million barrels, respectively, this week," ANZ
bank said on Thursday.
The inventory build will add to an oversupply that has
caused a 60 percent price fall since June 2014. Oil production
already exceeds demand by 0.5-2 million barrels per day.
Warmer-than-usual weather in the northeast United States, a
major market for heating oil, and a shale oil boom in the
country are contributing to the rise in stockpiles.
Moreover, the Organization of the Petroleum Exporting
Countries (OPEC) is widely expected to keep its high output
unchanged at a meeting in Vienna this Friday.
"Reports were the majority of OPEC members support a
production cut, except for the dominant supplier Saudi Arabia,"
ANZ said.
Oil prices briefly turned positive on Wednesday after
Tehran's oil ministry news agency Shana said that a majority of
OPEC members agree on output cuts, but the report also pointed
out that OPEC's top producer Saudi Arabia was not supportive of
the reduction.
A strong U.S. dollar, which hit its highest against the euro
in more than seven months on Wednesday, also weighed on oil
prices.
A strong dollar is a negative for oil markets as it makes
greenback-dominated contracts such as crude futures more
expensive for holders of other currencies.