Crude futures fall after strong build in U.S. oil products stocks

TOKYO, July 18 (Reuters) - Oil prices fell on Thursday,
extending declines into a fourth day, after official data showed
U.S. stockpiles of products like gasoline rose sharply last
week, suggesting weak demand during the peak driving season.
Brent crude LCOc1 futures were down 15 cents, or 0.2%, at
$63.51 a barrel by 0044 GMT. They fell 1.1% on Wednesday.
U.S West Texas Intermediate crude CLc1 futures fell 26
cents, or 0.5%, to $56.52. The U.S. benchmark dropped 1.5% in
the previous session.
While data on Wednesday from the U.S. Energy Information
Administration showed a larger-than-expected drawdown in crude
stockpiles last week, traders focussed on large builds in
refined product inventories dragging prices down.
"Oil markets are very heavy under the weight of a
counter-seasonal build in gasoline inventories, which is
typically a harbinger of worse things to come," said Stephen
Innes, managing partner at Vanguard Markets.
"Gasoline consumption is painfully weak given U.S. consumers
are in peak driving season," he said.
U.S. crude inventories USOILC=ECI fell 3.1 million
barrels, the EIA said, more than analysts' forecasts for a
decrease of 2.7 million barrels. However, gasoline stocks USOILG=ECI rose 3.6 million
barrels, compared with analysts' expectations in a Reuters poll
for a 925,000-barrel drop. Distillate stockpiles USOILD=ECI
grew by 5.7 million barrels, much more than expectations for a
613,000-barrel increase, the EIA data showed.
Crude production was disrupted last week by Storm Barry,
which came ashore on Saturday in central Louisiana as a Category
1 hurricane, the first major storm to hit the U.S. Gulf of
Mexico this season.
More than half of daily crude production in the Gulf of
Mexico remained offline by Tuesday, as most oil companies were
re-staffing facilities to resume production.
The market also shrugged of another incident involving a
tanker in the Middle East amid tensions between the United
States and Iran.
U.S. officials say they are unsure whether an oil tanker
towed into Iranian waters was seized by Iran or rescued after
facing mechanical faults as Tehran asserts, creating a mystery
at a time of high tension in the Middle East.