* U.S. crude stocks up 2.3 mln bbls vs forecasts for 3.3 mln
rise
* Build came despite surge in crude refinery runs
* Weak dollar, Wall Street rally lent support to oil
* Producer country output freeze just "hot air" -analyst
(New throughout, updates prices and market activity to
settlement)
By Barani Krishnan
NEW YORK, March 30 (Reuters) - Oil prices settled steady on
Wednesday, erasing most of the day's gains, after U.S.
government data showed crude inventories at all-time peaks again
despite strong refinery runs.
Crude stockpiles in the United States USOILC=ECI rose 2.3
million barrels last week, reaching a seventh straight week of
record highs at 534.8 million barrels, the Energy Information
Administration (EIA) reported.
The build was a million barrels less than forecast by a
Reuters poll. Still, some analysts worried that stockpiles rose
even with refinery utilization USOIRU=ECI at the highest
seasonal rate since 2005. EIA/S
"The data poses a bit of a conundrum, in that crude stocks
still increased so much despite strong refining runs and an
apparent drop in imports," said Matt Smith, director of
commodity research at ClipperData.
U.S. crude futures' front-month contract CLc1 settled up 4
cents at $38.32 a barrel. It rose almost $1.60, or 3 percent,
earlier, tracking a 3-month high in Wall Street shares .SPX
and near 2-week low in the dollar .DXY . .N FRX/
Brent crude's front-month LCOc1 settled up 12 cents at
$39.26, retreating from a session peak of $40.61.
A monthly Reuters survey showed the Organization of the
Petroleum Exporting Countries likely put out 100,000 barrels per
day more in March, with Iran boosting supply after the lifting
of export sanctions, while near-record shipments from southern
Iraq offset maintenance and outages among smaller producers.
Oil prices have risen about 50 percent since mid-February
after major producers within and outside OPEC floated the idea
of freezing production at January's highs. Some analysts say the
rally has breached fundamentals and crude should trade lower.
Barclays (LON:BARC) in a report described macroeconomic concerns and
high inventories as the oil market's "ball and chain" that could
keep prices in the mid-$30s to lower-$40 levels through the
second quarter.
On Tuesday, Saudi Arabia and Kuwait, two of OPEC's biggest
exporters, said they would resume production at the jointly
operated 300,000-barrels-per-day Khafji field even with a
meeting on the production freeze set for April 17. Brent and
U.S. crude fell about 3 percent in that session, reacting to the
news.
"The fact that the announcement comes so shortly before the
meeting in Doha is a disastrous sign," said Commerzbank (DE:CBKG) oil
analyst Carsten Fritsch. "After all, it gives the impression
that the lip service paid to freezing oil production is nothing
but hot air."
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Graphic for U.S. crude prices http://graphics.thomsonreuters.com/US/2/PVB_20163003091101.png
Graphic for Brent crude prices http://graphics.thomsonreuters.com/US/2/PVB_20163003091929.png
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