* US crude inventories jump on imports, refinery cuts
* CFTC chair says supports position limit exemptions
* IEA says oil prices have hit floor around $50-60
(Updates prices)
By Matthew Robinson
NEW YORK, July 29 (Reuters) - Oil dropped more than 5 percent on
Wednesday after data showed a surge in U.S. crude inventories on higher
imports and lower refinery activity.
Crude stocks in the world's top consumer jumped 5.1 million barrels in
the week to July 24, according to data from the U.S. Energy Information
Administration, countering analyst expectations for an inventory draw.
[]
The build came as crude imports hit a six-month high and refiners --
their profits battered by limp demand -- cut back on runs.
Over the past four weeks, U.S. fuel consumption dropped 4.1 percent
against year-ago levels, led by a 10.7 percent drop in demand for
distillates, which include key industrial fuels such as diesel. Distillate
stocks rose to the highest level in nearly 25 years, while gasoline
stockpiles fell, the EIA said.
U.S. crude <CLc1> traded down $3.63 to $63.60 a barrel by 1:54 p.m. EDT
(1754 GMT). London Brent <LCOc1> fell $3.09 to $66.79 a barrel.
"The build this week will put more pressure on oil, especially given
that we were already seeing return of risk aversion across markets, with
the U.S. dollar climbing and the stock market lower," said Rachel Ziemba,
lead energy analyst for RGE Monitor in New York.
Optimism an economic recovery has helped push crude prices up from
below $33 a barrel in December, with investors looking toward positive
economic data for signs of a turnaround in flagging oil demand.
U.S. stock markets [] traded lower on Wednesday and the dollar rose
broadly as investors piled into safer-havens. []
Further pressure came after commerce Department data showed new durable
goods orders fell 2.5 percent in June, the largest percentage drop since
January, after rising 1.3 percent in May. []
Falling demand due to the recession knocked crude off record highs near
$150 a barrel hit last July, clipping a six-year rally in commodities that
had been fueled by rapid growth expansion in emerging economies such as
China.
The wide swings in prices has raised concern over speculation in
commodities markets, prompting the U.S. Commodities Futures Trading
Commission to consider implementing position limits for some commodity
futures.
CFTC Gary Gensler said on Wednesday he supported exemptions from tough
new investor limits for bona fide hedgers, however, despite worries they
could limit the usefulness of position limits. []
"While I believe that we should maintain exemptions for bona fide
hedgers, I am concerned that granting exemptions for financial risk
management can defeat the effectiveness of position limits," he said during
the second day of hearings on tightening regulatory oversight of U.S.
futures markets.
A senior analyst for the International Energy Agency said volatile oil
prices may have reached a floor. []
"The evidence so far suggests that prices have probably reached a floor
which maybe around $50 to $60," Eduardo Lopez told Reuters on the sidelines
of an oil and gas conference in Cape Town.
(Reporting by Matthew Robinson, Gene Ramos, and Robert Gibbons in New
York; Joe Brock and Barbara Lewis in London; Editing by John Picinich)
