FOCUS-Oil prices lower as U.S. weekly stocks rise
LONDON, Sept 30 (Reuters) - Oil prices fell on Wednesday but held most of their recent gains, despite an unexpected build in the inventories of the huge U.S. market even after hurricane related halts to production.
World benchmark Brent Blend crude traded six cents down at $14.55 a barrel at 1551 GMT on London's International Petroleum Exchange.
The American Petroleum Institute (API) issued its latest weekly U.S. inventory figures late on Tuesday which showed a much larger than anticipated build in crude and heating oil stocks.
The figures, which are often used as a short-term indicator of demand in the world's largest energy consuming nation, were disappointing for dealers who had bet on a decline in stocks following supply disruptions caused by Hurricane Georges.
However, compared with a year ago, crude oil stocks have fallen, suggesting to one broker that ''we are not seeing so much crude into the United States as you would expect'' even when there are no closures of U.S. Gulf ports.
''The market is holding because what you see in the physical balance is not as out of kilter as people thought,'' said Michael Rothman, senior energy analyst at Merrill Lynch in New York.
He added that a meeting of the oil ministers of OPEC giants Saudi Arabia and Venezuela and non-OPEC Mexico on Friday was not expected to produce concrete measures to tackle prices, which are still some $5 below the 1997 average.
The three ministers were expected to discuss the likely course of oil prices next year after jointly orchestrating two rounds of cuts to world crude supply.
The market has recovered some $3 a barrel after the second round of cuts came into effect in July, taking out some 3.0 million barrels per day (bpd) from the market with Organisation of the Petroleum Exporting Countries members contributing 2.6 million bpd of the total.
But some danger signals remained. Royal Dutch/Shell Group on Tuesday signalled its intenton to cut back operations at its European refineries if the market for refined products did not improve.
A few other European refiners were also said to be considering reducing runs, a move which would dampen demand for crude oil.
''We're monitoring refinery margins on a daily basis and it's for sure that they've been badly hit, mainly with strong crude prices, mainly Dated Brent,'' the official said.
(Note: this article is ''in progress''; there will likely be an update soon.)
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