* Rising U.S. stockpiles pressure oil prices
* Saudi sees demand growth; concerned about speculation
* Coming up: API oil data, 4:30 p.m. EST Tuesday
(Recasts, updates prices, market activity to settlement)
By Robert Gibbons
NEW YORK, Jan 24 (Reuters) - Oil fell more than 1 percent
on Monday as ample U.S. inventories were seen on the rise and
after Saudi Arabia's oil minister expressed concerns about the
influence of speculators on prices.
Brent's premium to U.S. benchmark West Texas Intermediate
crude <CL-LCO1=R> remained robust and reached $9.76 a barrel
intraday on Monday, the highest since it hit $10.37 on Feb. 12,
2009. But the spread narrowed to less than $9, helped by news
that trading Hetco had sold a big North sea crude position.
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Reuters Insider segment on Brent/WTI spread:
http://link.reuters.com/xym67r
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Technical weakness helped pull crude prices lower, brokers
and analysts said, with U.S. crude finding support just above
the 2011 low of $87.25 struck on Jan. 7.
U.S. crude oil for March delivery <CLc1> fell $1.24, or
1.39 percent, to settle at $87.87 a barrel, trading as low as
$87.27 after slipping from an early $89.63 intraday peak.
In London, ICE Brent crude for March <LCOc1> fell 99 cents
to settle at $96.61 a barrel, trading from $96.23 to $98.17.
Total Brent trading volume was above 461.600 lots traded on
Monday, according to Reuters data, 20 percent above the 250-day
average.
Total U.S. crude volume was above 782,300 lots traded with
less than an hour of post-settlement trading left, 14 percent
above the 250-day average of 685,424 lots.
"The complex is suddenly taking on a heavy feel given its
inability to advance along with fresh stock market highs and a
rebound in the euro," Jim Ritterbusch, president at Ritterbusch
& Associates, wrote in a note.
"Some of today's selling appeared triggered by overnight
comments from the Saudi oil minister that implied that
additional barrels could become available to the market if
demanded while at the same time, the suggestion appeared to be
made that moderately lower prices would be desirable."
Brent got an early boost when Saudi Oil Minister Ali
al-Naimi, said he expected global oil demand to rise between
1.5 million and 1.8 million barrels per day in 2011 -- more
than forecast by the International Energy Agency.
[] []
But the Saudi minister also said he expected prices to
stabilize and voiced concern about speculators pushing prices
higher. Brent prices scaled $99 a barrel as recently as Jan. 14
and some analysts said Naimi voicing concern about speculators
may have caused increased investor caution.
Oil trader Hetco sold three North Sea Forties crude oil
cargoes on Monday and offered three others. []
The spot market fell as the company gradually exited a
position that at one point had represented about a third of the
Forties February program and helped cause the Brent premium to
U.S. crude to soar.
Cold weather in the U.S. Northeast and forecasts for more
in Europe helped limit U.S. heating oil futures <HOc1> losses
on Monday and allowed the heating oil profit margin, or crack
spread <CL-HO1=R>, to surge near $24 a barrel intraday, a
two-year high. []
U.S. heating oil demand was expected to average 14.4
percent above normal this week, the National Weather Service
said on Monday. []
AMPLE INVENTORIES WEIGH
Last week, the U.S. Energy Information Administration
reported that U.S. crude oil inventories rose 2.62 million
barrels last week, against expectations stockpiles would be
lower. []
High inventories, especially at Cushing, Oklahoma, the
delivery point for the U.S. crude contract, have helped keep
U.S. crude prices in check, while North Sea production problems
had allowed Brent to close . []
A Reuters analyst survey on Monday expected crude stocks to
have posted another build last week, with imports expected to
be up again and with inventories benefiting from the resumption
of the flows in the Alaska pipeline. []
The seesawing euro and dollar added to oil price
volatility. The euro climbed to a two-month high against the
dollar as investors pushed the euro through key technical and
trading levels on expectations of higher euro zone interest
rates.
"There is some concern that around the globe the stimulus
from central banks is going away with the improving economic
recovery and the threat of inflation," said Phil Flynn, analyst
at PFGBest Research in Chicago, citing that as a factor helping
weigh on oil prices.
The U.S. Federal Reserve starts a two-day policy meeting on
Tuesday and investors will be eyeing the Fed's announcement on
Wednesday to sift through any changes to interest rates or
stimulus policies.
(Additional reporting by Gene Ramos in New York, Alex Lawler in
London and Florence Tan in Singapore; Editing by David
Gregorio)
