* Libya says oil could top $90 this year
* IEA warns rapid price rise could hurt economic recovery
* U.S. President Obama to meet Saudi king, discuss oil
(Updates prices throughout, adds fresh quote, EIA demand
data)
NEW YORK, June 3 (Reuters) - Oil fell 4 percent on
Wednesday, dragged down by an unexpected build in U.S. crude
stockpiles and a stronger dollar.
U.S. crude <CLc1> traded down $2.96 to $65.59 a barrel at
1:13 p.m. (1713 GMT). ICE Brent crude <LCOc1> fell $2.75 to
$65.42 a barrel.
Crude oil inventories in the world's top consumer jumped by
2.9 million barrels last week as imports rose, according to
data from the U.S. Energy Information Administration, against
analyst forecasts for a draw. []
Pressure also came as the dollar recovered from a 2009 low
against the euro after monetary sources in Asia said they would
keep buying U.S. Treasuries even if the U.S. credit rating were
cut. [] The stronger dollar tends to depress the value of
commodities denominated in the greenback.
"The crude build and the dollar's rise are the major
factors in today's drop in crude oil futures," said Andy Lebow,
broker of MF Global in New York. "Prices rallied recently based
on hopes of improving oil demand but the latest data doesn't
support that line of thinking."
Total U.S. fuel demand over the four weeks ending May 29
fell by 7.7 percent against year-ago levels, according to the
EIA. U.S. gasoline demand over the period, which included the
Memorial Day holiday weekend that traditionally kicks off
summer driving season, was down 0.4 percent from last year.
Signs of a recovery in the global economic crisis have
lifted stocks markets in recent weeks, raising expectations oil
demand could rebound and sending crude prices up 30 percent in
May. U.S. stocks dropped on Wednesday on weaker-than-expected
economic data showing the U.S. services sector shrank again
last month. []
U.S. President Barack Obama flew to OPEC kingpin Saudi
Arabia on Wednesday, where he said he would raise the issue of
price volatility with King Abdullah and indicate no halt to the
need for oil imports. []
The Organization of Petroleum Exporting Countries last week
agreed to leave production targets unchanged after setting a
series of cuts last year to stem oil's steep slide from near
$150 a barrel as the economic crisis battered demand.
Top Libyan oil official Shokri Ghanem told the Reuters
Global Energy Summit that oil prices could top $90 this year
and should average $70-80 a barrel in 2009. []
(For other news from the Reuters Global Energy Summit,
click on http://www.reuters.com/summit/GlobalEnergy09
?PID=500)
The head of the International Energy Agency, however,
warned that a quick rise in fuel costs could damage any fragile
recovery in the global economy. []
"If the price moves too quickly relative to economic
recovery, that will certainly hurt the economic recovery so we
have to watch carefully," IEA Executive Director Nobuo Tanaka
told the Reuters Global Energy Summit.
(Reporting by Matthew Robinson, Joshua Schneyer, Robert
Gibbons and Gene Ramos in New York and Christopher Baldwin in
London; Editing by Christian Wiessner)
