Oil falls as spotlight returns to growing glut, dollar up

By Simon Falush and Barani Krishnan

LONDON/NEW YORK (Reuters) - Crude oil futures fell back towards $45 per barrel on Wednesday as the dollar gained and investor focus shifted back to a deep global supply glut.

Brent was down 57 cents at $45.55 a barrel at 1554 GMT, having touched a low of $45.11.

The benchmark hit its highest since Nov. 11 at $46.50 on Tuesday after Turkey shot down a Russian jet. It had risen for five consecutive days, its longest run of positive sessions since April.

U.S. West Texas Intermediate (WTI) futures fell 37 cents to $42.50 a barrel, having gained $1.12 to $42.87 on Tuesday.

Weekly data from the U.S. Department of Energy showed weekly crude oil stocks up 961,000 barrels versus a forecast rise of 1.2 million barrels, a slightly less bearish figure than expected.

However gasoline stockpiles rose faster than expected and distillate inventories gained in the face of the forecast of a fall highlighting the scale of over-supply.

Despite the gains in recent sessions Brent is still down 8.2 percent this month and more than 20 percent this year, and analysts said there was unlikely to be any substantial recovery in the coming days.

"With the dollar stronger and the inventory numbers bearish on whole, we suspect rallies if any will be rather short-lived," Tariq Zahir, trader in crude oil spreads at Tyche Capital Advisors in New York, said.

A gain in the dollar, which rose to an eight month high against a basket of currencies, also weighed on prices as oil, priced in the U.S. unit, became less affordable to holders of other currencies.

OPEC is determined to keep pumping oil vigorously despite the resulting financial strain -- even on the policy's chief architect, Saudi Arabia -- alarming weaker members who fear that prices may slump further towards $20.

President Tayyip Erdogan said on Wednesday that Turkey did not want any escalation of tension over the downing of the Russian warplane, and that it had acted simply to defend its own security and the "rights of our brothers" in Syria.

(Additional reporting by Meeyoung Cho; Editing by William Hardy)