Hong Kong/Seoul: Oil extended losses as rising crude stockpiles kept supplies at the highest level in more than eight decades before major producers meet in Doha to discuss freezing output.

Futures lost as much as 2.2% in New York after falling 1% on Wednesday. Inventories rose by 6.6 million barrels last week to 53.65 crore, the most since 1930, according to government data. The jump was higher than all nine estimates in a Bloomberg survey. Global markets will “move close to balance" in the second half of the year as lower prices take their toll on production outside OPEC, the International Energy Agency said.

“Doha is the key event hanging over the market," Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “Even if there is an agreement, there are doubts about how it will be implemented. The potential for sustained price gains are limited while the inventory remains so high."

Oil has rebounded after falling to the lowest in more than 12 years amid signs a global glut will ease as US production declines. While forty analysts and traders surveyed by Bloomberg News were evenly split over whether talks on 17 April will succeed in capping output, a majority of those who predicted a deal said it would have no impact on actual flows of crude.

West Texas Intermediate for May delivery fell as much as 92 cents to $40.84 a barrel on the New York Mercantile Exchange and was at $41.24 at 9:07am London time. The contract dropped 41 cents to $41.76 on Wednesday after advancing 13% the previous three sessions. Total volume traded was about 26% above the 100-day average.

Global Glut

Brent for June settlement lost as much as 89 cents, or 2%, to $43.29 a barrel on the London-based ICE Futures Europe exchange. The contract fell 51 cents to $44.18 on Wednesday. The global benchmark was at a premium of $1.27 to WTI for June.

The world surplus will diminish to 200,000 barrels a day in the last six months of the year from 15 lakh million in the first half, the IEA said in a report on Thursday. Production outside the Organization of Petroleum Exporting Countries will decline by the most since 1992 as the US shale oil boom falters. Bloomberg

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