Oil drops as U.S. inventory build, record output rekindles supply worries

TOKYO, Nov 28 (Reuters) - Oil prices fell on Thursday,
extending losses from the previous session after official data
showed U.S. crude and gasoline stocks rose against expectations
and production hit a record.
Brent crude futures LCOc1 were down 16 cents, or 0.3%, at
$63.90 a barrel by 0141 GMT, having dropped 0.3% on Wednesday.
U.S. West Texas Intermediate crude CLc1 fell 21 cents, or
0.4%, to $57.90, after falling 0.5% in the previous session.
Crude stockpiles in the United States swelled 1.6 million
barrels last week as production hit a record high of 12.9
million barrels per day (bpd) and refinery runs slowed, the
Energy Information Administration said. Analysts in a Reuters
poll had forecast an inventory drop of 418,000 barrels. EIA/S
More bearish was a 5.1 million-barrel rise in gasoline
stocks, compared with forecasts for a 1.2 million-barrel gain.
Oil prices had risen earlier this week on expectations that
China and the United States, the world's two biggest crude
users, would soon sign a preliminary agreement, putting an end
to their 16-month trade dispute.
"The stock data overshadowed other supply-side issues and a
general pick-up in sentiment regarding the U.S.-China trade
deal," ANZ Research said in a note.
Forces based in eastern Libya said on Wednesday they had
driven rival factions from the 70,000-bpd El Feel oilfield after
attacking the area with air strikes, leading to production being
halted and raising some worries about supply. In the United States as well, energy services company Baker
Hughes BRK.N reported that U.S. oil drillers reduced the
number of drilling rigs for a record 12 months in a row. RIG/U
Drillers cut three oil rigs in the week to Nov. 27, bringing
the count down to 668, lowest since April 2017, Baker Hughes
said in its report released a day early due to the U.S.
Thanksgiving holiday.