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may come under pressure...

  1. buddfox

    9,240 posts.
    NEW YORK, March 31 (Reuters) - World oil prices dropped on
    Wednesday after U.S. data showed heavy imports had boosted
    inventories to their highest level in 19 months, and as market
    skepticism limited the impact OPEC's announcement it will act
    on previously agreed output curbs.
    U.S. light crude ended down 49 cents a barrel at $35.76,
    recovering after falling as much as 3.9 percent to $34.85
    earlier in the session, shortly after the inventory data.
    London Brent ended 94 cents down at $31.51 a barrel.
    Figures from the U.S. government's Energy Information
    Administration showed commercial crude stocks rising 5.7
    million barrels last week to 294.3 million, the highest level
    since August 2002.
    The EIA said strong imports last week from Saudi Arabia,
    the world's top producer, swelled the inventory, but even with
    the rise U.S. stocks are still nearly 16.1 million barrels less
    than the five-year average for this time of the year.
    Stocks of gasoline also rose 1.4 million barrels to sit
    above year-ago levels at 200.9 million barrels, steepening
    losses in gasoline futures that had earlier in the day hit a
    record high after news of a refinery fire.
    The crude and gasoline builds relaxed fears of summer
    supply tightness, which have brought the NYMEX light crude
    futures price up 7 percent since the OPEC producer group agreed
    in February to trim its supply to 23.5 million barrels per
    day.
    OPEC ministers in Vienna cast off earlier wrangling over
    whether to delay that cut, intended to take effect April 1, and
    forged ahead with their decision to trim 1 million barrels per
    day from global crude supplies.
    However, traders said they doubted the cartel would be able
    to implement the measure, and that the crude and gasoline
    builds were driving the market lower.
    "These numbers are clearly negative. We got a larger than
    expected build in a market that was already vulnerable. The
    OPEC news was priced in and, once they made it official, the
    market started struggling, and the data pushed it over the
    edge," said Tom Bentz of BNP Paribas Commodity Futures Inc.
    Prices also lost steam after oil major BP Plc said its
    Texas refinery was running almost normally after a fire late on
    Tuesday. News of the fire had helped U.S. gasoline futures jump
    to an all-time high at $1.1770 a gallon in early trade.
    OPEC has based the rationale for its cut on a seasonal drop
    in demand after the Northern Hemisphere winter, which would
    threaten prices. It also said it would adhere to the agreed
    cuts.
    The United States and other consuming nations, worried that
    sky-high oil prices could hurt the economy, had urged OPEC to
    raise output. The International Energy Agency also said on
    Wednesday it was worried about OPEC's supply curbs.
    A senior Bush Administration official said that White House
    officials had spoken to leaders of Kuwait and the United Arab
    Emirates on Wednesday to recommend that the group delay the
    output restrictions to allow oil prices to cool.
    Initial crude loading schedules however indicate that
    actual supply cuts in April are likely to be just about
    one-third of what the cartel plans and analysts say that at
    such high prices it will be difficult for cartel members to
    adhere to their quotas.
    A Reuters survey showed last week that not more than
    335,000 bpd were likely to be cut in April. The cartel meets
    again in June to adjust output policy if needed.
    ((Writing by Abi Sekimitsu; editing by Eric Walsh;
    Reuters Messaging: [email protected], +1
    646 382 6051))

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