 "Oil tumbles up to 4%, stockpile worry cuts short rally")
Global oil prices fell as much as four per cent on Monday on concerns a six-week market recovery has gone beyond fundamentals, as US crude oil stockpiles continue to mount and Iran maintains little interest in a global production freeze.
Market intelligence firm Genscape reported an inventory build of 585,854 barrels in Cushing, Oklahoma, taking the delivery hub for US crude futures closer to capacity, traders who saw the data said.
The Organization of the Petroleum Exporting Countries (Opec) said global demand for crude from its members, including Saudi Arabia, Iraq and Iran, will be less than previously thought in 2016 due to competing non-Opec supply. Opec supply will likely exceed demand by about 760,000 barrels per day (bpd), up from 720,000 bpd implied earlier, it said.
Russia said Opec's meeting on a production freeze with other key oil producers like itself will probably be held in Doha in next month. It said Iran supports the plan, although Tehran was keen to restore its crude exports first to pre-sanction levels.
Investment bank Morgan Stanley predicted a $25-$45 trading range for US crude in an oversupplied but volatile market, concurring with several analysts' views.
"We feel that the bulk of this stronger than expected 5-6 week price advance has been seen and that prices will be shifting into a near term consolidation phase," said Jim Ritterbusch of Chicago energy consultancy Ritterbusch & Associates.
US crude was down $1.65, or 4.3 per cent, at $36.85 a barrel by 12:18 pm EDT (1618 GMT). It hit a three-month high of $39.02 on Friday, surging from a 12-year low of $26.05 a month earlier.
Brent was down $1.20, or 2.9 per cent, at $39.19 barrel. The global crude benchmark fell to a 2003 low of $27.10 in late January.
Monday's price tumble came after last week's rally of 7 per cent in US crude, which was up for a fourth straight week.
Brent gained four per cent last week, up for a third week in a row.
Some analysts expect a more bearish supply-demand picture when the US government issues weekly oil data on Wednesday.
Last week's report showed a crude build of nearly four million barrels to above 521 million barrels, the fourth straight week of growing to record highs.
"I think as we approach $40 for WTI and Brent, the market will not like a net build of more than 2 million barrels this week," said Scott Shelton, energy broker at ICAP in Durham, North Carolina.
Money managers, including hedge funds, raised their bullish bets on U.S. crude for a third week in a row to November highs but cut net long positions in Brent.
