Oil falls after big rise in US crude stocks

Oil fell on Wednesday after a weekly US government report showed a surprising rise in crude stockpiles heading into peak winter demand. US crude settled 93 cents lower at $59.24 a barrel, while London Brent lost 90 cents to settle at $59.49 a barrel.
The US government's Energy Information Administration said crude stocks rose last week by 5.1 million barrels, compared with a forecast for a 600,000-barrel increase, putting inventories about 6 percent over last year.
The big increase came as imports rebounded sharply following some port disruptions that had delayed shipments earlier in the month. Slow refinery activity also contributed to the inventory build, analysts said.
"It's clearly bearish," said Jason Schenker of Wachovia Securities in North Carolina. "Expectations for crude supplies were not even in the same ball park."
Gasoline stocks, meanwhile, rose by 1.4 million barrels, compared with expectations for a 900,000 barrel decrease. Distillate inventories, including diesel and heating oil, fell by 1.2 million barrels, in line with a Reuters poll of analysts.
Although distillate stocks had fallen, the draw was concentrated in diesel and not in heating oil, which fell by only 100,000 barrels.
Bulging inventories in consumer nations raised concern in the Organisation of the Petroleum Exporting Countries, which decided to cut output by 1.2 million barrels per day from November 1.
Echoing earlier comment, Kuwait's oil minister said Opec would cut output again in December if prices deteriorated. He said a $55-$60 price range was satisfactory. Prices have fallen by around 25 percent from a record for US crude of $78.40 in July and have been locked in a range of roughly $58-$62 for more than a month.
Oil had rallied by well over a dollar on Tuesday, partly in response to news severe weather at the Alaskan port of Valdez had halted crude oil shipments and forced companies to cut output by nearly two-thirds.
Terminal operators said weather conditions at the Valdez port had improved, allowing one tanker to complete loading its cargo and depart. Foul weather is expected in the area until Thursday. Traders said Tuesday's gains had also been driven by strength in refined products as traders covered positions ahead of Wednesday's government data and the Thanksgiving holiday on Thursday and Friday in the United States.