Oil prices dive as US crude reserves jump

London, Aug 31 (AFP) World oil prices fell sharply todayon news that US commercial crude inventories rose by more thanexpected last week, indicating weakening demand and stokingsupply glut concerns. At around 16.45 GMT, US benchmark West Texas Intermediatefor delivery in October recoiled USD 1.55 to USD 44.80 perbarrel. Brent North Sea crude for the same month lost a hefty USD1.30 to USD 47.07 a barrel compared with the closing levelyesterday. The US government’s Department of Energy (DoE) reportedthat commercial crude inventories rose by 2.3 million barrelsin the week to August 26. That easily outstripped market expectations for a smallergain of 1.3 million barrels, according to analysts polled byBloomberg News, and followed a 2.5-million gain the previousweek. Last week’s increase also exceeded an estimated rise of900,000 barrels from industry body the American PetroleumInstitute. "Oil prices added to early declines after DoE inventorydata showed a build," said CMC Markets analyst Jasper Lawler. Rising US stockpiles tend to send oil prices lowerbecause they add to the global supply glut – and indicateweakening demand in the world’s top consumer of crude. The DoE added today that gasoline or petrol reserves fell700,000 barrels, while distillates – including diesel andheating fuel – rose 1.5 million. Prices also fell on the back of the stronger greenback,which makes dollar-denominated commodities more expensive forbuyers using weaker currencies. Ahead of the US inventories data, the market was roiledby oversupply worries as Iran’s oil minister reportedly statedhis country planned to boost output. The comments by Bijan Zangeneh, carried by Iran’sofficial news agency yesterday, added to a feeling that aninformal OPEC meeting with Russia in September may not resultin a deal to boost prices. Zangeneh said Iran needed to raise its output to regainthe market share lost while it was under internationalsanctions, which were lifted only in January. Iran has struggled to raise production above four millionbarrels per day since the sanctions were removed, according tothe report, which said it is currently producing 3.8 million. "Many speculators are now just waiting to find outwhether Saudi Arabia and other members of OPEC will agree nextmonth to a production freeze deal with some non-OPECproducers, led by Russia," added City Index analyst FawadRazaqzada. (AFP) PRGPRG