U.S. oil falls to 6-year low on U.S. stockpile build

By Lisa Barrington

LONDON (Reuters) - U.S. oil prices hit their lowest in almost six and a half years on Wednesday after U.S. data showed an unexpected rise in crude stockpiles.

U.S. crude stocks were up 2.6 million barrels at 456.21 million barrels last week, the U.S. Energy Information Association (EIA) said. Stocks at Cushing, Oklahoma, the delivery point for U.S. crude futures, rose 326,000 barrels to 57.44 million.

This was in sharp contrast to a Reuters poll, which forecast an 800,000-barrel inventory decrease. [EIA/S]

The American Petroleum Institute reported on Tuesday that U.S. crude stocks had fallen by an even greater margin - by 2.3 million barrels in the week ended Aug. 14.

"The numbers were a total surprise with crude showing a build when the whole (market) was forecasting a draw," Tariq Zahir, managing member at Tyche Capital Advisors in Laurel Hollow in New York, said.

"We feel these numbers are not factored in to the current price of spot crude."

U.S. crude oil futures, also known as West Texas Intermediate (WTI), were down $1.20 at $41.42 a barrel by 1450 GMT, after touching a low of $41.18. The front-month, September, U.S. crude oil contract is due to expire on Thursday.

North Sea Brent crude was down 90 cents at $47.91 a barrel.

Prices had steadied earlier on Wednesday after a six-week rout driven by global oversupply and concerns about falling demand in Asian economies and the United States.

U.S. oil production is at record levels and producer costs appear to be declining, with no output scale-back anticipated.

Bearish sentiment was exacerbated last week when repairs at a large refinery in Whiting, Indiana caused a large stock build at Cushing.

Oil has lost about a third of its value since June and prices have been hovering just above six-year lows for the past week. The downward trend has been driven by global oversupply and record stockpile levels, analysts say.

(Additional reporting by Henning Gloystein in Singapore; Editing by Christopher Johnson and Dale Hudson)