* Canada wildfire curtails some oil output
* Brent off 2016 high on OPEC output rise, demand concerns
* U.S. crude stocks extend build to fresh record - EIA
(Updates with settlement prices)
By Jessica Resnick-Ault and Catherine Ngai
NEW YORK, May 4 (Reuters) - A bigger-than-expected build in
U.S. crude inventories to fresh record highs pushed oil markets
lower on Wednesday after an early rally over concerns about
production cuts in Canada's oil sands region due to a wildfire.
U.S. crude stocks, which have been setting record highs
since January, grew 2.8 million barrels last week, government
data showed, about a million barrels more than analysts'
expectations. Gasoline stocks also posted a surprise increase.
The data overshadowed concerns over evacuations in the
Canadian province of Alberta, where a wildfire raged unchecked
through the Canadian city of Fort McMurray in the heart of the
country's oil sands region, prompting some companies, including
Suncor Energy SU.TO and Royal Dutch Shell RDSa.L , to cut
back production.
"It's hard to see how it (the wildfire) wouldn't have a
broader impact temporarily on pipeline exports," said John
Kilduff, a partner at Again Capital Management in New York. "I
think it was a legitimate scare that will prove transitory."
U.S. crude futures CLc1 settled at $43.78 a barrel, up 13
cents or 0.30 percent, while Brent crude LCOc1 settled down 35
cents or 0.78 percent at $44.62 a barrel.
Gasoline futures RBc1 fell 1.17 percent to $1.4925 a
gallon, after the EIA data showed a surprise increase of the
fuel in storage. The gasoline crack spread 1RBc1-CLc1 , a key
figure in determining refiner margins, fell by 7.5 percent to
$18.28 a barrel in afternoon trading.
Brent crude has fallen more than 5 percent from Friday's
high in response to rising output from the Organization of the
Petroleum Exporting Countries OPEC/O , signs of economic
slowdown in the United States and Asia, and a stronger dollar.
"It would not come as any surprise if speculative financial
investors were to take profits against this news backdrop," said
Carsten Fritsch, analyst at Commerzbank (DE:CBKG).
While total OPEC output rose in April, outages around the
world have been supporting prices. The Canada disruption adds to
supply losses in Nigeria and Iraq, concern about renewed losses
in Libya and fears that Venezuela's cash crunch could hit the
OPEC member's output.
Some believe the rally has further to go in 2016 as the
supply glut eases.
"Investor optimism for oil has markedly improved," said
Nitesh Shah of ETF Securities. "We believe the gains in price
are sustainable and not just driven by speculative gains."