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UPDATE 5-Oil falls from 8-week high on stock build forecast







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09/03/2010 09:27 London time | story: 572480

* U.S. crude inventories up 1.9 mln barrels last week - poll

* OPEC meets in Vienna next week to decide oil production

* Reuters poll sees no change in OPEC output targets

* Coming up: API stocks data at 2130 GMT

(Updates detail, prices)

By Christopher Johnson

LONDON, March 9 (Reuters) - Oil prices slipped back from eight-week highs on Tuesday on expectations of a rise in U.S. crude inventories and a slightly stronger dollar.

U.S. crude inventories probably rose for a sixth straight week as imports edged up and refinery utilisation remained flat, a Reuters survey showed. [EIA/S]

Crude oil futures fell $1 per barrel on both sides of the Atlantic, with benchmark U.S. futures <CLc1> for April dropping to a low of $80.86, down $1.01, before recovering slightly to trade around $80.94 by 1042 GMT.

North Sea Brent crude oil futures <LCOc1> slipped to a low of $79.33, down $1.14, before paring losses to stand at $79.49.

"Forecasts of a yet another build in U.S. crude stocks show the disconnect between the fundamentals of oil supply and demand, which are quite bearish, and hopes of economic recovery, which are bullish," said Commerzbank analyst Carsten Fritsch.

"But the market doesn't seem to want to hear negative news for long and tends to react more strongly on the upside. It is two steps upwards, one step down at the moment."



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The Organisation of the Petroleum Exporting Countries (OPEC) will keep oil production targets on hold when it meets in Vienna on March 17, but could raise output later this year as the world recovers from recession, pushing up demand for fuel, a Reuters poll showed on Monday. [ID:nLDE62715Z]

CONTENT

OPEC ministers say they are content with oil prices where they are and analysts say they are unlikely to do anything to alter the current trading range between $70 and $85 per barrel.

Iran's OPEC governor was quoted on Tuesday as saying the 12-country grouping may not necessarily increase output if oil demand rises, as other producers might boost their production.

The U.S. Energy Information Administration is expected to hold its global oil demand growth forecast steady for this year at 1.2 million barrels in its latest report, although some analysts believe the EIA might be too optimistic given stubbornly high oil prices and an uncertain economy. [ID:nN08188405]

The EIA's monthly short-term supply and demand forecast will be published on Tuesday at 1500 GMT.

The industry-funded American Petroleum Institute (API) will publish inventory data on Tuesday at 2130 GMT, followed by government statistics from the EIA on Wednesday at 1530 GMT.

U.S. crude inventories gained 1.9 million barrels in the week to March 5, the Reuters poll showed, while gasoline stockpiles may have increased by 300,000 barrels.

Distillates, a fuel category that includes heating oil and diesel, were expected to have dropped 900,000 barrels because of lingering winter weather conditions in the U.S. Northeast, the biggest heating market.

The dollar, which for months has been inversely correlated with oil prices, edged up on Tuesday against a basket of currencies, putting some pressure on oil prices. [.DXY]

But some traders said the impact of the currency on the crude prices has lessened, especially at times when economic data releases enter the spotlight. (Additional reporting by Alejandro Barbajosa; editing by Amanda Cooper)









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