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UPDATE 9-Oil prices fall on U.S. stock build, concerns over freeze meeting

Published 2016-04-13, 10:52 a/m
© Reuters.  UPDATE 9-Oil prices fall on U.S. stock build, concerns over freeze meeting
MS
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LCO
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* U.S. crude inventories up 6.6 million barrels last week
-EIA
* Saudi Arabia oil minister rules out production cut -report
* Iran won't send oil minister to meeting in Doha -report
* OPEC revises its 2016 global demand forecast down
* U.S. crude stocks rise more than expected -API

(Adds EIA data, comments, updates prices)
By Ahmad Ghaddar
LONDON, April 13 (Reuters) - Oil futures traded lower on
Wednesday on a larger than expected build in U.S. crude
inventories and on concerns that a producer meeting set for
Sunday in Doha to discuss freezing output will do little to trim
oversupply .
Brent crude LCOc1 was down 62 cents at $44.07 per barrel
at 1439 GMT, while U.S. crude CLc1 declined by 63 cents to
$41.54.
U.S. crude inventories rose 6.6 million barrels last week to
536.53 million barrels, the Energy Information Administration
said on Wednesday, compared with analyst expectations of a 1.9
million barrel rise. EA/IS
But a larger than expected draw in gasoline inventories
softened the blow of soaring crude stocks. Gasoline fell by 4.2
million barrels to 239.76 million, compared with an analyst
forecast of a 1.4 million barrel draw.
"Even with the large build in oil stocks, everyone's focus
is shifting to that summer driving season and with the gasoline
drawdown of 4.24 million barrels, I would expect crude oil to
continue to rally," senior market strategist at Chicago-based
RJO Futures said on Wednesday.
Prices were already under pressure from comments by Saudi
oil minister Ali al-Naimi in the al-Hayat newspaper in which he
confirmed his country's position that an outright production cut
was out of the question.
"Forget about this topic," al-Naimi told the paper, when
asked about any possible reduction in his country's crude
output.
Iranian oil minister Bijan Zanganeh does not plan to attend
the Doha meeting but Iran will be sending a representative, an
Iranian journalist from the Seda weekly wrote on his Twitter
account on Wednesday.
Iran has said it does not plan to participate in the freeze
agreement as it seeks to boost its production in the
post-sanctions era.
Morgan Stanley (NYSE:MS) analysts said the market may still be
underestimating the potential near-term headline upside risk of
the Sunday meeting.
"A deal not only seems likely - as leaks and prior
announcements have suggested - but confirmation of the deal,
greater clarity about the freeze or hints of further OPEC action
could reinforce the bullish sentiment," the bank said on
Wednesday.
The Organization of the Petroleum Exporting Countries
lowered its forecast of world oil demand growth by 50,000
barrels per day (bpd) and said in its monthly report on
Wednesday further downward revisions could follow.
OPEC pumped 32.25 million bpd in March, the group said
citing secondary sources, up about 15,000 bpd from February.


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Brent oil outlook chart http://graphics.thomsonreuters.com/US/2/PVB_20161304091501.png
U.S. crude oil outlook chart http://graphics.thomsonreuters.com/US/2/PVB_20161304090326.png
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