* U.S. product inventories rise more than expected for
second week
* Oil demand may rise more slowly than expected - Morgan
Stanley
* Iran says no request received for emergency OPEC meeting
(Changes dateline to NEW YORK, previous LONDON, updates
throughout)
By Jessica Resnick-Ault
NEW YORK, Jan 13 (Reuters) - Brent oil prices fell on
Wednesday and U.S. crude pared gains after a massive build in
U.S. gasoline and diesel inventories fed into bearish sentiment
about stagnating demand amid the supply glut that has brought
oil prices close to 12-year lows.
Both contracts saw intra-day highs of more than $1 above
Tuesday's closing price on upbeat Chinese economic data earlier
in the session.
By 12:35 p.m. EST (1735 GMT), Brent crude LCOc1 was down
32 cents at $30.54 a barrel, while U.S. West Texas Intermediate
crude (WTI) CLc1 was up 11 cents at $30.55.
Data showing that crude inventories USOILC=ECI rose
234,000 barrels last week, much less than expectations, was
overshadowed by reported builds of 8.4 million barrels in
gasoline USOILG=ECI and over 6 million in distillates, which
includes diesel and heating oil USOILD=ECI . {EIA/S]
"Overall, it's a bearish report. I think today's inventory
report is all about products...The long awaited massive decline
in crude production is not starting again," said Dominic
Chirichella, senior partner at Energy Management Institute in
New York.
This was a second week of huge builds in refined fuel with
gasoline surging the most since 1993 in the previous week.
"Last week's build was massive, and this week's was much
larger than the seasonal norm," said John Saucer, Vice President
at Mobius Risk Group in Houston.
The dynamics of supply have shifted as diesel stockpiles
have surged past year-ago levels, indicating a products surplus,
Saucer added..
Analysts at Morgan Stanley (N:MS) also warned that a rise in demand
for crude could be lower than previously expected.
"Any slowing in the rate of demand growth could delay the
timing of rebalancing and ultimately a price recovery," they
said in a research note.
The potential for the calling of an emergency OPEC meeting
also weakened on Wednesday when Iran's oil minister was quoted
as saying he had not received any request for such a gathering.
Nigeria's oil minister said on Tuesday that a "couple" of
OPEC members had asked for an emergency meeting.
Days ahead of the expected implementation of a landmark
nuclear accord between Tehran and world powers, Iran briefly
detained a group of U.S. sailors after they entered Iranian
waters.
Iran released the sailors on Wednesday after holding them
overnight, determining they had entered Iranian waters by
mistake. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART-Brent oil to drop to $29.85 http://graphics.thomsonreuters.com/US/2/PVB_20161301085035.png
CHART-U.S. oil neutral in $30.13-$30.92 range http://graphics.thomsonreuters.com/US/2/PVB_20161301084133.png
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