(Repeats to widen distribution)
* U.S. crude inventories rise by 2.3 mln barrels - API
* EIA inventory data expected to weigh further on prices
* Weaker dollar caps losses
By Karolin Schaps
LONDON, July 22 (Reuters) - Oil prices fell on Wednesday
after an unexpected rise in U.S. crude stocks, adding to a
picture of global oversupply that has dragged down values over
the past year.
Industry data released on Tuesday by the American Petroleum
Institute (API) showed crude inventories at the Cushing,
Oklahoma hub rose 2.3 million barrels last week, compared with
analyst expectations for a decrease of the same volume. API/S
"The U.S. crude oil stocks build reported by the API last
night is weighing on prices," said Tamas Varga, analyst at
London brokerage PVM Oil Associates.
U.S. crude CLc1 held above $50 a barrel, trading down 71
cents at $50.15 at 0832 GMT.
The August contract CLQ5 , which expired on Tuesday,
settled at $50.36 a barrel on its last day of trade, after
slipping as low as $49.77 during the session.
Brent crude LCOc1 was down 62 cents at $56.42 a barrel.
U.S. government crude stocks data to be released by the
Energy Information Administration (EIA) at 1430 GMT on Wednesday
is expected to shed further light on the build-up in
inventories.
A slightly weaker dollar capped losses in the crude market
by making it cheaper for investors holding other currencies to
purchase oil contracts.
The dollar .DXY was down 0.02 percent against a basket of
global currencies.
The global supply glut is also taking its toll on the
products market. China's exports of diesel will reach their
highest since at least 1999 in August as its local market cannot
absorb high output from refineries, sources said.
ID:nL3N101350
OPEC kingpin Saudi Arabia has also been stepping up exports
of diesel. ID:nL5N0ZZ03S