UPDATE 7-Falling U.S. inventories boost oil prices

* Official U.S. inventory data to be published on Wednesday
* Brimming oil tanks compound oversupply
* OECD crude inventories 20 pct above five-year average
* Analysts expect oil prices to remain low or drop further

(Updates prices)
By Simon Falush
LONDON, Nov 18 (Reuters) - Oil rose on Wednesday on reports
of falling stockpiles and rising refinery activity in the United
States, but analysts said a global supply glut would keep prices
under pressure.
Brent crude futures LCOc1 were up 77 cents at $44.34 per
barrel by 1437 GMT after settling 99 cents lower the day before.
U.S. crude futures CLc1 were up 50 cents at $41.17 a barrel.
The American Petroleum Institute (API), an industry group,
said on Tuesday that U.S. crude stockpiles fell last week by
482,000 barrels due partly to higher refinery runs.
Official inventory data is due at 1530 GMT from the U.S.
government's Energy Information Administration (EIA).
A poll of eight analysts predicted a crude stock build of
1.9 million barrels on average in the week ended Nov. 13
EIA/S .
Despite the gains on Wednesday, most analysts expect prices
to remain low for the rest of the year and into 2016 as
production continues to outpace demand.
"It's a bullish signal for macro traders," said Virendra
Chauhan, analyst at Energy Aspects.
"But if you look beyond the day-to-day, the fundamentals are
bearish. There's talk of floating storage and if you look at
differentials for physical oil in the North Sea, for Urals and
for West Africa they are very low."
Also adding to a picture of a well-supplied market, Saudi
Arabia raised its oil exports in September by 113,000 barrels
per day (bpd) to 7.111 million bpd from 6.998 million bpd in the
previous month, official data showed on Wednesday.
A trader said that investors who had sold heavily on the
back of the growing glut were covering short positions ahead of
the EIA data.
Onshore inventories across the world are on the brink of
being full, while offshore tanker storage requires prices on the
far end of the curve to be higher than prompt deliveries in
order to warrant storage.
"The market is actively seeking storage solutions,"
Jefferies said in a note, but with January 2017 prices around $6
a barrel above those for January 2016, the spread is too low to
make floating storage attractive as freight costs still have to
be included.
An economic slowdown in Asia, and China in particular, is
also hitting other commodities. Copper fell towards six-year
lows on Wednesday as traders increased their bets on waning
demand in top user China. urn:newsml:reuters.com:*:nL3N13D16T

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