* U.S. crude stocks rise unexpectedly - EIA
* OPEC unlikely to increase output at September meeting
(Updates prices)
By David Sheppard
LONDON, Aug 26 (Reuters) - Oil fell to near $71 a barrel on
Wednesday, extending hefty losses from the previous session, as
rising stockpiles of U.S. crude outweighed positive economic
data.
U.S. crude for October <CLc1> fell 79 cents to $71.26 a barrel
by 12:40 p.m. EDT (1640 GMT), after falling $2.32 on Tuesday.
Brent crude <LCOc1> fell 49 cents to $71.33 a barrel after losing
$2.44 the previous day.
The U.S. Energy Information Administration (EIA), the
statistical arm of the Department of Energy, reported on Wednesday
that crude stocks in the world's largest energy consumer rose by
200,000 barrels last week. []
While the build in crude stocks was nowhere near as large as
the 4.3 million rise reported by the American Petroleum Institute
on Tuesday, it still confounded initial market predictions for a
1.1 million barrel drop. []
"We remain in a situation of massive over-supply, which is off
the charts, but it does appear to be peaking," Summit Energy
analyst Brad Samples said.
Gasoline stocks fell by 1.7 million barrels last week
according to the EIA, against expectations for a smaller 1 million
barrel drop, while distillates rose by 800,000 barrels compared
with predictions for a 300,000 barrel build.
SELL-OFF?
Investors took the opportunity to lock-in profits on Tuesday
after crude touched the key psychological $75 mark for the first
time since last October, crowning a near 130 percent jump in
prices from the lows at the turn of the year.
Some analysts said the failure to break through the key level
may signal that prices have topped out, with demand for oil still
depressed by the global economic slowdown and signs of a broad
recovery still murky.
"The price action of the past 24 hours would appear to favor
additional price declines," said Jim Ritterbusch, president of
Ritterbusch & Associates.
Prices took some support from U.S economic data released on
Wednesday showing a mild recovery in the housing market, but
earlier data on durable goods orders suggested lingering weakness
in the manufacturing sector.
Equity markets were mixed with Wall Street edging higher while
European bourses generally dipped, highlighting the uncertainty
surrounding the economic outlook. []
Venezuela's oil minister Rafael Ramirez said OPEC is unlikely
to raise output at its September meeting, despite concerns from
some quarters that oil prices are too high for a still fragile
global economy. []
"Inventories have declined but they remain above average. We
need for them to come down to the average levels," Ramirez said.
Another member of the Organization of the Petroleum Exporting
Countries, Iran, said oil demand was set to increase next year by
up to 1 million barrels per day after this year's sharp decline.
(Additional reporting by the New York Energy Desk and Ramthan
Hussain in Singapore; editing by Sue Thomas and Lisa Shumaker)
