* "Highly unlikely" OPEC, Russia will cooperate - Goldman
* U.S. crude stocks likely hit record last week -Reuters
poll
* US crude stocks up 3.8 mln bbls, gasoline rises 6.6 mln
bbls-API
* BP and Exxon report worst results in more than a decade
(Adds API data)
By Devika Krishna Kumar
NEW YORK, Feb 2 (Reuters) - Oil slumped for the second
straight day, with U.S. crude ending 5.5 percent lower on
Tuesday, as hopes of a deal to curb one of the worst supply
gluts in history continued to fade amid concerns that mild
winter weather in the U.S. will dampen demand.
The oil markets erased most of last week's four-day rally,
when it soared almost 20 percent from the lows touched in
mid-January, after Russia's Energy Minister said OPEC kingpin
Saudi Arabia suggested a production cut.
Hopes dimmed this week as no deal has emerged and talks
between Russia's energy minister and Venezuela's oil minister on
Monday failed to result in any clear plan to reduce output.
U.S. investment bank Goldman Sachs (N:GS) said it was "highly
unlikely" the Organization of the Petroleum Exporting Countries
would cooperate with Russia to cut output, saying the move would
also be self-defeating as stronger prices would bring previously
shelved production back to the market.
"As they (producers) continue to disappoint, we're going to
trade lower, until the market forces them to do something and I
think that's at a much lower price than here," said analyst John
Kilduff, partner at Again Capital LLC in New York.
Brent crude LCOc1 closed down $1.52, or 4.4 percent, at
$32.72 a barrel. It fell as much as 5.9 percent to $32.23 in the
session.
U.S. West Texas Intermediate crude (WTI) CLc1 settled 5.5
percent, or $1.74 lower at $29.88 per barrel, after falling as
low as $29.81.
The contract fell further in post-settlement trade to $29.57
after data from the American Petroleum Institute, an industry
group, showed 3.8 million-barrel build in U.S. crude stocks last
week. API/S
U.S. government energy data is due on Wednesday. EIA/S
With forecasters projecting the weather in the United States
will moderate during the last eight weeks of the November-March
winter heating season, U.S. heating oil futures HOc1 were down
2 percent and gasoline RBc1 7 percent lower.
The selloff in gasoline futures deepened to more than 9
percent in post-settlement trade after API data showed gasoline
inventories soared 6.6 million barrels last week.
Oil stockpiles have been on the rise even outside the United
States, with Russian output hitting a post-Soviet high in
January.
Crude prices are in danger of returning to the $20s unless
there was concrete reaction on the supply side, said Thomas
Saal, analyst at INTL FC Stone in Miami, Florida.
Economic data due later in the week, including U.S. nonfarm
payroll, unemployment figures and producer prices from the euro
zone, could pressure oil prices further, Again Capital's Kilduff
said.
"I think it's in the cards to re-test the lows from
mid-January," he said, referring to Brent's low of $27.10 and
WTI's $26.19.
Still, Citi called a bottom on prices on Tuesday, saying
that even while a deal may not materialize, the current lows
will be short lived.
Meanwhile, the prolonged downturn in prices has crushed the
oil majors' results.
Exxon Mobil Corp (N:XOM) XOM.N , the world's largest publicly
traded oil company, reported its smallest quarterly profit in
more than a decade and planned to cut 2016 spending by a
quarter, while BP BP.L announced its biggest annual loss and
thousands more job cuts.