Oil slides 1 percent, hits one-month low; OPEC, U.S. inventory in focus

By Barani Krishnan

NEW YORK (Reuters) - Oil fell 1 percent on Tuesday, hitting one-month lows, as U.S. gasoline prices pared an early rally sparked by a pipeline blast and crude was also pressured by renewed doubts about whether OPEC will follow through with proposed output cuts.

Analysts' forecast that U.S. crude stocks had risen by more than 1 million barrels last week after unseasonal declines in seven of the past eight weeks also weighed on crude. The American Petroleum Institute (API) will report weekly inventory numbers at 4:30 p.m. EDT (2030 GMT) ahead of official government data on Wednesday.

Brent crude was down 75 cents, or 1.5 percent, at $47.86 a barrel by 1:45 p.m. EDT (1745 GMT). Its session low was $47.82, the lowest since Sept 28.

 

U.S. West Texas Intermediate crude fell 61 cents, or 1.3 percent, to $46.25, also a one-month low.

Crude was up earlier, boosted as the U.S. dollar slid, <.DXY> making dollar-denominated oil cheaper for users of other currencies.

Crude was also helped by a gasoline rally after Colonial Pipeline Co [COLPI.UL] shut its main gasoline and distillates pipelines following an explosion in Alabama. Gasoline futures jumped 13 percent, then pared gains on news Colonial had reopened another gasoline line.

"Oil rode up at first on the Colonial pipeline news, but that effect has faded," said John Kilduff, partner at New York energy hedge fund Again Capital.

"All attention is back on OPEC's failure thus far to put together a convincing production cut plan, and the possibility of higher U.S. crude stocks from here."

A month ago, the Organization of the Petroleum Exporting Countries proposed its first production cut in eight years to reduce a global oil glut. Brent hit one-year highs and WTI 15-month peaks in early October as OPEC kingpin Saudi Arabia talked up the plan, inviting non-member producers such as Russia to make cuts too.

In the past two weeks, crude prices have fallen as more OPEC member said they were unwilling or unable to cut production, casting doubt on what the group will do when it meets on Nov. 30 in Vienna. An OPEC official document on Monday, indicating the group was making progress on the plan, did little to convince traders.

"It looks like we will break down more momentously unless the Saudis intervene with big output cuts of their own," said David Thompson, executive vice-president at Powerhouse, a commodities-focused broker in Washington. Thompson sees WTI testing support next at $45.

(Additional reporting by Amanda Cooper in LONDON and Aaron Sheldrick in TOKYO; Editing by Marguerita Choy, William Hardy and David Gregorio)