Oil falls as worry over growing stockpile cuts short rally
By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell about 3 percent on Monday on concerns that a six-week market recovery has gone beyond fundamentals as U.S. crude stockpiles continue to build and Iran maintains little interest in joining major producers in freezing production.
Crude inventories across the United States likely hit record highs for a fifth straight week last week, rising 3.3 million barrels, a Reuters poll of analysts said. [EIA/S]
Stockpiles at the Cushing, Oklahoma grew almost 850,000 barrels to 69.6 million in the week to March 11, bringing storage at the delivery hub for U.S. crude futures to near capacity, traders said, citing market intelligence firm Genscape.
The Organization of the Petroleum Exporting Countries, meanwhile, said global demand for crude from its members, including Saudi Arabia and Iran, will be less than previously thought in 2016 due to competing non-OPEC supply. OPEC supply will likely exceed demand by about 760,000 barrels per day, up from 720,000 bpd it implied earlier.
Russia said OPEC's meeting with other key oil producers on an output freeze will probably be held in Doha in next month. It said Iran supports the plan, while Tehran says it wants to double its crude exports to 4 million bpd first.
"All the data out there is suggesting higher supply and lesser demand for oil, and that could only mean lower prices," said Phillip Streible, market strategist at RJO Futures in Chicago.
U.S. crude futures CLc1 settled down $1.32, or 3.4 percent, at $37.18 a barrel, while Brent LCOc1 finished down 86 cents, or 2 percent, at $39.53.
Monday's price slide came after last week's rally of 7 percent in U.S. crude, which was up for a fourth straight week. Brent gained 4 percent last week, up for a third week in a row. Continued...