* EIA data on build in U.S. oil inventory hangs over market
* European refinery runs fall again in March - Euroilstock
* Explosion halts northern Iraq oil pipeline flow to Turkey
* Coming Up: German Ifo report; Friday 0800 GMT
(Updates prices, adds detail)
By Christopher Johnson
LONDON, April 22 (Reuters) - Oil fell below $83 per barrel
on Thursday after higher U.S. inventories signalled demand in
the world's top oil consumer was sluggish despite the global
economic recovery.
Crude stocks in the United States rose unexpectedly last
week, government statistics showed, and fuel supplies climbed
more than forecast. []
European oil industry data added to the bearish tone with
figures from industry monitor Euroilstock showing oil refinery
output in 16 European countries fell by 10.1 percent in March
from the same month last year. []
U.S. benchmark June light crude oil futures, also known as
West Texas Intermediate (WTI), <CLc1> dropped more than $1 per
barrel to a low of $82.30 before recovering slightly to trade
around $82.50 by 1310 GMT. The front-month contract reached an
18-month high above $87 on April 6.
U.S. prices came under pressure from figures on Wednesday
showing a 1.8-million-barrel rise to over 34 million barrels
last week in crude oil inventories at Cushing, Oklahoma, the
landlocked pricing point for NYMEX crude futures.
The Energy Information Administration (EIA), said the
increase at Cushing was responsible for most of a national U.S.
crude oil stocks rise of 1.9 million barrels.
But ICE Brent crude futures <LCOc1> held up better than U.S.
futures and June Brent was trading around $2 higher than WTI on
Thursday, down 87 cents at $84.83 a barrel.
North Sea crude supplies will tighten over the next month
due to offshore maintenance work and Brent is also responding to
evidence of more Chinese demand, analysts say. []
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Carsten Fritsch, energy analyst at Commerzbank, said the EIA
report was still weighing heavily on the oil market.
"Our view is that oil prices are somewhat decoupled from
fundamentals at the moment and do not yet reflect the high level
of stocks," Fritsch said.
"AHEAD OF FUNDAMENTALS"
Edward Meir, analyst at brokers MF Global, highlighted what
he saw as the potentially negative influence of the dollar on
oil as the euro remained under pressure after dropping against
the dollar for a fifth day in a row on Wednesday.
The dollar was up around 0.45 percent against a basket of
currencies on Thursday. [] <EUR=>
"We would suggest that prices have gotten somewhat ahead of
the fundamentals," Meir said. "We are consequently looking for a
modest pullback over the short-term, particularly if the dollar
continues to strengthen on the back of the Greek debt crisis."
China's apparent oil demand in March rose 12.3 percent from
a year earlier, the seventh double-digit increase in a row,
according to Reuters calculations from official data released on
Wednesday. []
Rising consumption in China, the world's second-largest oil
user, has helped support crude prices as demand from developed
economies struggles to rebound from the recession.
The market received some support from news of an explosion
early on Thursday on the Iraq-Turkey oil pipeline which carries
a quarter of Iraq's crude exports. []
The pipeline blast in the northern Iraqi province of Nineveh
is likely to affect oil exports via the Kirkuk to Ceyhan
pipeline for as much as a week, Iraqi officials said.
(Additional reporting by Alejandro Barbajosa in Singapore;
editing by William Hardy)
