Oil in reverse as crude stock build fans oversupply fears

Oil extends last week's losses into Monday, falls nearly 2%: report

Oil extends last week's losses into Monday, falls nearly 2%: report

Adding pressure to oil prices, US crude stockpiles rose more than expected last week, as production surged in a record build, according to the US Energy Information Administration.

United States crude oil and gasoline stocks rose last week, data from the American Petroleum Institute showed, with crude inventories rising by 4.6 million barrels to about 495.2 million barrels, well above analyst expectations of a 1.2-million-barrel build in a Reuters' poll of analysts.

Libya's production is expected to rebound to 1 million barrels per day (bpd) in the coming weeks. Some of that was due to offshore facilities coming back online after Hurricane Delta.

That is likely to complicate efforts by the Organization of the Petroleum Exporting Countries to restrict output to deal with weak demand.

Crude oil prices remain well on the defensive although they manage to grab some buying interest near the $37.00 mark per barrel on Wednesday.

"Between the United States and Libya, production is up nearly 2 million bpd in the past couple weeks", said Robert Yawger, director of energy futures at Mizuho in NY, noting if OPEC+ takes the view that US producers are only going to increase production, then OPEC+ may "unleash the 2 million barrels in January and let the chips fall where they may. most likely crude oil down considerably". The stronger dollar makes oil more expensive for holders of foreign currencies, which traders said weighed on crude prices.

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Energy companies and ports along the US Gulf Coast prepared on Tuesday for Hurricane Zeta as it entered the Gulf of Mexico. The rig count is an indicator of future supply.

Oil prices fell, hit by lockdowns in Germany and France. Overall gasoline supplied, a measure of demand, is down 10 per cent from the year-over-year period, the EIA said.

In early Asia, Brent crude was up 12 cents, or 0.3%, at $40.58 a barrel by 0039 GMT, having dropped more than 3% overnight.

"The U.S. Gulf closures are seen as fleeting, whereas sizable stock-builds in the U.S. serve to amplify the market's bearish sentiment on demand", said Vandana Hari, founder of Vanda Insights in Singapore.

USA gasoline inventories expanded by 2.25 million barrels last week, while crude supplies at the key storage hub of Cushing climbed by 136,000 barrels, according to the API.

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