* Oil drops below $71 a barrel after EIA data
* U.S. products builds weigh on crude prices
* Crude stocks at NYMEX delivery point in Cushing up
(Updates prices)
By Rebekah Kebede
NEW YORK, Dec 9 (Reuters) - Oil dropped more than 2 percent
to below $71 a barrel on Wednesday, after government data
showed larger-than-expected builds in U.S. refined products.
U.S. crude <CLc1> for January delivery dropped $1.78 to
$70.84 a barrel by 1:19 p.m. EST (1819 GMT).
London Brent crude <LCOc1> fell $2.44 to $72.75.
"The size of the product build was surprising and somewhat
bearish and that is weighing on crude right now," said Stephen
Schork, editor of the Schork Report in Villanova,
Pennsylvania.
Distillate inventories, which include heating oil and
diesel, had a surprise build of 1.6 million barrels to 167.3
million barrels, contrary to forecasts for a fall of 600,000
barrels, according to the U.S. Energy Information
Administration. []
Gasoline stockpiles were up 2.2 million barrels at 216.3
million barrels, above analysts' projections of a 1.5 million
barrel build.
Meanwhile, U.S. crude stockpiles had a surprise draw of 3.8
million barrels to 336.1 million barrels, against expectations
for a 600,000 barrel build.
The EIA said weekly crude stocks at Cushing, Oklahoma, the
delivery point for NYMEX crude oil futures, were up by 2.5
million barrels, at 33.4 million barrels.
Rising stocks at Cushing over the last month have been
helping to deepen the discount for prompt oil below forward
prices, in what traders call a contango.
Losses over the last five days have been partly driven by a
recovery in the dollar. Oil is priced in dollars so a rise in
the currency makes fuel more expensive to most consumers
outside the United States.
However, the dollar <=USD> index against major currencies
<.DXY> was down around 0.1 percent by early afternoon.
"You're seeing the selling snowball and without the support
of strong equity prices and a weak dollar,... the fundamental
picture is regaining control of the market," Gene McGillian,
analyst at Tradition Energy in Stamford, Connecticut.
For a graphic showing the oil and dollar, see:
http://graphics.thomsonreuters.com/129/CMD_OIL$CR1209.gif
The oil market received some support on Wednesday from
comments by two oil ministers, who said the Organization of the
Petroleum Exporting Countries should not raise its oil output
targets when it meets later this month. []
The group, which pumps more than a third of the world's
oil, meets in the Angolan capital of Luanda on Dec. 22 and many
OPEC ministers see the current oil price range of $70-$80 as
fair.
"The market is reasonably stable, so no, I don't think so,"
Nigeria's minister of state for petroleum, Odein Ajumogobia,
said on the sidelines of a meeting of gas exporting nations
when asked if OPEC needed to pump more oil.
(Additional reporting by Christopher Johnson in London;
Editing by Keiron Henderson; Editing by Marguerita Choy)
