* EIA surprise crude stocks build pressures oil
* Weak dollar supports oil, pushes gold to record high
* Coming up: U.S. jobless claims data, 8:30 a.m. EDT Thurs
(Recasts, updates prices, market activity, changes byline and
moves dateline from previous LONDON)
By Robert Gibbons
NEW YORK, Sept 22 (Reuters) - Crude oil prices fell on
Wednesday after government inventory data showed U.S. crude and
oil product stocks rose last week and retreating from earlier
gains on lift from the dollar's weakness after the U.S. Federal
Reserve raised expectations of more monetary easing.
U.S. oil demand remained sluggish and crude oil stockpiles
rose despite expectations that an outage on a pipeline carrying
Canadian crude to the United States would curb imports, the
report from the U.S. Energy Information Agency showed. []
Combined U.S. commercial crude and refined products
inventories hit a record 1.144 billion barrels, the highest
level since the EIA began collecting weekly data in 1990.
U.S. crude for November <CLc1> delivery fell 62 cents, or
0.83 percent, to $74.35 per barrel by 1:41 p.m. EDT (1741 GMT),
having traded from $73.84 to $76.
The November contract took the front-month position after
Tuesday's expiration of the October contract, which went off the
board at $73.52 a barrel, down $1.34 on the day.
On Wednesday, ICE Brent for November <LCOc1> fell 54 cents
to $77.88 a barrel.
The EIA inventory report said U.S. crude stocks rose 970,000
barrels in the week to Sept. 17, against a forecast for stocks
to be down 1.9 million barrels.
The report also showed gasoline stocks rose unexpectedly and
that distillate stocks increased slightly more than forecast.
The EIA report followed industry data from the American
Petroleum Institute released late Tuesday, which painted a
similar picture.
"When the API data came out yesterday, a lot of people were
skeptical and wanted to wait for the DOE numbers but these
aren't bullish either," said Tom Bentz, broker at BNP Paribas
Commodity Futures Inc in New York.
"With the Enbridge outage last week, it is surprising to see
a build in inventories," Bentz added.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on crude and oil product inventories:
http://link.reuters.com/tyb94p
Graphic on performance of oil and other commodities:
http://link.reuters.com/hun72k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
DOLLAR BROADLY WEAKER
Ahead of the inventory report, crude oil prices had risen
more than $1 to $76 a barrel on lift from a broadly weaker
dollar.
The dollar's slide followed Federal Reserve comments
expressing greater concern about sluggish U.S. growth and low
levels of inflation in a statement that many investors took as
opening the door wider to pumping more dollars into the economy.
[]
Expectations of further monetary easing sent the dollar
index <.DXY> to a six-month low and the greenback to a
seven-week low against the euro. []
A weaker dollar can lift dollar-denominated oil prices
because it improves the purchasing power of consumers using
other currencies and lessens the value of greenbacks received by
producers.
"The weaker dollar reflects the Fed statement and I expect
more liquidity will be supportive for commodities," said
Christophe Barret, oil analyst at Credit Agricole.
Gold was in sight of $1,300 an ounce, having hit a record
high for a fifth straight session after the Fed said it was
ready if needed to add more stimulus and that inflation was
running below where it would like it to be. []
Also seen as supportive and helping limit crude oil losses
was the prospect of threatening tropical weather. The U.S.
National Hurricane Center on Wednesday raised to 60 percent the
chance that a tropical depression could form in the Caribbean
Sea over the next 48 hours. []
Computer weather models continued to forecast the system
would move west across the Caribbean, hit Central America and
miss energy operations in the Gulf of Mexico, but oil traders
and brokers still were eyeing the system as a potential threat
on Wednesday.
(Additional reporting by Joe Brock in London and Alejandro
Barbajosa in Singapore; Editing by Lisa Shumaker)
