Oil prices fall as U.S. crude stocks hit record for seventh successive week

By Keith Wallis

(Reuters) - Oil futures fell in early Asian trade on Thursday amid renewed worries of global oversupply after official data showed U.S. crude inventories rose last week to a record for the seventh time in a row.

That increase came despite seasonal refinery utilisation hitting an 11-year high, while a fall in the dollar index gave some support for oil prices.

The front-month contract for U.S. crude futures dropped 29 cents to $38.03 a barrel by 0021 GMT, after settling up 4 cents in the previous session following a gain of 3 percent earlier in the session.

Brent crude futures fell 25 cents to $39.01 a barrel after ending the previous session up 12 cents, having retreating from a session peak of $40.61.

U.S. crude stocks rose by 2.3 million barrels to 534.8 million barrels in the week to March 25, data from the U.S. Energy Information Administration shows.

But the increase was less than analysts' expectations of a 3.3 million barrel build.

Refinery crude runs rose by 414,000 barrels per day (bpd) and refinery utilisation rates rose 2 percentage points to 90.4 percent of total capacity, the highest seasonal rate since 2005.

"A slightly weaker dollar continues to provide some mild support to industrial commodity prices, but concerns about slowing demand are likely to persist," ANZ said in a note on Thursday.

Concerns over global oversupply were further fuelled after crude output from the Organization of the Petroleum Exporting Countries rose in March to 32.47 million bpd from 32.37 million bpd in February, according to a Reuters survey based on shipping and other data.

The increase followed the lifting of Iranian sanctions and near-record exports from southern Iraq that offset maintenance and outages in smaller producers.

Iran is expected to add half a million barrels of oil supply a day within a year from existing oilfields after sanctions were lifted in January, Fatih Birol, the head of the International Energy Agency told Reuters on Wednesday.

(Reporting by Keith Wallis; Editing by Clarence Fernandez)