* Record U.S. crude stockpiles despite higher refinery runs-
EIA
* Output freeze plan could lose impact if U.S. stocks keep
rising
(New throughout, updating prices and activity to settlement)
By Barani Krishnan
NEW YORK, Feb 18 (Reuters) - Brent settled lower on Thursday
after data showing U.S. crude inventories rose to record highs
overshadowed production freeze plans by oil major producers that
had sharply boosted the market this week.
The U.S. government's Energy Information Administration
(EIA) said crude stockpiles rose 2.1 million barrels last week,
to a peak of 504.1 million barrels in the third week of hitting
record highs in past month. EIA/S
The EIA also cited record high gasoline inventories and
higher stocks of distillates that include heating oil and
diesel.
Brent LCOc1 , the global benchmark for crude, settled down
22 cents at $34.28 a barrel, having risen more than $1.20 before
the data. It had gained a total of more than $4 between Friday
and Wednesday.
U.S. crude CLc1 settled up by a modest 11 cents at $30.77
a barrel, after an earlier peak at $31.98. Reuters data showed
the daily volume in U.S. crude futures at just over 200 million
barrels, down 75 percent from two weeks ago.
Oil prices had risen more than 14 percent over the last
three days after a plan by Saudi Arabia and Russia, endorsed
without commitment by Iran on Wednesday, to freeze oil output at
January's highs.
Thursday's EIA data, if followed through by more builds in
U.S. crude, could undermine oil producers' hopes for continued
price recovery, traders and analysts said.
"We should see crude sell off in the days to come," said
Tariq Zahir, oil trader and fund manager at Tyche Capital
Advisors in Long Island, New York.
"We're still in a very well-supplied market and with
refinery maintenance coming up and warmer weather heading to the
U.S. East Coast, we are likely to see substantial builds in the
weeks to come."
The Saudi-Russian production freeze plan, also joined by
Qatar and Venezuela, is the first such deal in 15 years between
the Organization of the Petroleum Exporting Countries and
non-OPEC members.
But following Iran's failure to commit to a production
freeze, Iraq's oil minister on Thursday signalled Iraq would
wait for more cooperation between producers before committing to
freeze its own production.
Iran is the major obstacle to the deal, having pledged to
increase output sharply to regain market share lost during
sanctions, which were lifted last month after an agreement with
world powers, allowing Tehran to resume selling oil freely in
international markets.
While oil producers hope their efforts will end the 20-month
long selloff that brought crude down from above $100 a barrel in
mid-2014, the only certainty ahead could be choppier
markets.
"What we see still is extreme volatility," said Carsten
Fritsch, analyst at Commerzbank (DE:CBKG). "I would not be surprised to
see prices retreating again by a big margin in coming days."