U.S. crude oil prices dip after unexpected rise in stockpiles

By Henning Gloystein
SINGAPORE, Dec 2 (Reuters) - Crude prices dipped in early
Asian trading hours on Wednesday as U.S. stockpiles rose against
expectations, compounding a glut that is seeing hundreds of
thousands barrels of oil being produced every day in excess of
demand.
U.S. crude CLc1 was trading at $41.68 per barrel at 0000
GMT on Wednesday, down 17 cents from its last settlement and
down more than 10 percent since the start of November.
Traders said the dip was due to an unexpected 1.6 million
barrels increase in American crude stocks to 489.9 million,
compared with analysts' expectations for a decrease of 471,000
barrels.
The increase will add to ongoing oversupply which is seeing
between 0.5-2 million barrels per day of oil being produced in
excess of demand, leading to an over 60 percent price fall since
June 2014.
A meeting by the Organization of the Petroleum Exporting
Countries (OPEC) this Friday in Vienna is not expected to bring
a change in the group's policy, which has seen it keep output
high in an effort to defend market share against other producers
like Russia and North America.
"We expect the current status quo to persist. Saudi Arabia
is in no mood to cut output, especially as a collective cut
remains elusive amidst rising financial stress among other major
OPEC and key non-OPEC members," consultancy Energy Aspects said.
One of the supporting factors in oil prices has been demand,
especially in Asia where China, the world's biggest energy
consumer, is taking advantage of low prices to build up its
strategic reserves.
Barclays (L:BARC) bank said that high car sales despite a dip earlier
in the year also supported demand.
"China's implied oil demand growth ... grew at 3.8 percent
year-on-year in October (407,000 barrels per day), an
improvement relative to the 226,000 barrels per day growth in
September," Barclays said.
However, it forecast a moderation in consumption over the
rest of the year, with 2016 demand growth expected to average
300,000 barrels per day.


(Editing by Richard Pullin)