UPDATE 10-Oil falls 3 pct as equity markets drop, inventories climb

Reuters

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    * Wall Street dips again, pulling crude futures down
    * U.S. crude stocks up by 6 mln barrels -EIA
    * Gulf of Mexico oil output cut by 40 pct on Hurricane
Michael

 (Updates with settlement prices; adds commentary, market
activity)
    By Stephanie Kelly
    NEW YORK, Oct 11 (Reuters) - Oil prices slumped to more than
two-week lows on Thursday as global stock markets fell, with
investor sentiment made more bearish by a bigger-than-expected
build in U.S. crude inventories.
    Brent crude  LCOc1  futures fell $2.83 to settle at $80.26 a
barrel, a 3.41 percent loss, after hitting a low of $79.80, its
weakest since Sept. 24. The global benchmark has retreated after
hitting a four-year high of $86.74 on Oct. 3.
    U.S. West Texas Intermediate (WTI) crude  CLc1  futures fell
$2.2 to settle at $70.97 a barrel, a 3.01 percent loss. WTI hit
its lowest since Sept. 21.
    U.S. crude inventories  USOILC=ECI  rose 6 million barrels
last week, the Energy Information Administration said, more than
double analysts' expectations of a 2.6 million-barrels increase.
 EIA/S 
    "The significant increase in crude oil inventories is a
reflection of refineries going down for maintenance," said
Andrew Lipow, president of Lipow Oil Associates.
    Refinery crude runs  USOICR=ECI  fell by 352,000 barrels per
day as utilization rates  USOIRU=ECI  dropped 1.6 percentage
points, the EIA data showed.  urn:newsml:reuters.com:*:nL2N1WR11Y
    Falling U.S. equity markets and a global risk-off
environment also weighed on crude futures. On Wednesday, U.S.
stock markets tumbled, with the S&P 500 and the Dow Industrials
indexes posting their worst day in eight months, as solid
economic data reinforced expectations of multiple interest rate
hikes over the next year.  urn:newsml:reuters.com:*:nL4N1WR4L2  urn:newsml:reuters.com:*:nL2N1WQ21Y
    "The demand side of the oil equation is always much more
difficult to discern than the more transparent supply side and
as equities slide amidst rate increases, the oil market could
begin to discount a worst case scenario with regard to oil
demand expectations," Jim Ritterbusch, president of Ritterbusch
and Associates, said in a note.
    The Organization of the Petroleum Exporting Countries cut
its forecast of global demand growth for oil next year for a
third straight month, citing headwinds facing the broader
economy from trade disputes and volatile emerging markets.
 urn:newsml:reuters.com:*:nS8N1IR007
    OPEC sees the oil market as well supplied and is wary of
creating a glut next year, the group's secretary-general said on
Thursday.  urn:newsml:reuters.com:*:nL8N1WR2I1
    In the U.S. Gulf of Mexico, producers had cut output by 40
percent on Thursday due to Hurricane Michael, according to the
Bureau of Safety and Environmental Enforcement (BSEE), even as
some operators began returning crews to offshore platforms.
 urn:newsml:reuters.com:*:nL2N1WR1N0  urn:newsml:reuters.com:*:nL2N1WR1HR
    The cuts represent 680,107 barrels per day of oil
production, BSEE said, citing reports from 30 companies. 
    Michael crashed ashore Florida on Wednesday as the third
most powerful hurricane ever to strike the U.S. mainland. It has
since weakened to a tropical storm.  urn:newsml:reuters.com:*:nL2N1WR076

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
TECHNICALS-U.S. oil to fall to $70.67       
TECHNICALS-Brent oil may fall more to $80.46       
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Stephanie Kelly in New York, Christopher Johnson
in London and Aaron Sheldrick in Tokyo;
Editing by Marguerita Choy and Chizu Nomiyama)
 ((Stephanie.Kelly@thomsonreuters.com; 646-223-4471; Reuters
Messaging: stephanie.kelly.thomsonreuters.com@reuters.net))

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