SINGAPORE (Reuters) – Oil futures fell in Asian trade on Thursday, with U.S. crude hitting the lowest level in more than two weeks, amid renewed worries of global oversupply after U.S. crude inventories rose to a record high.

That increase came despite seasonal refinery utilisation hitting an 11-year high, while a rise in the dollar index put further pressure on oil prices.

Brent crude futures fell 45 cents to $38.81 a barrel as of 0518 GMT. It ended up 12 cents in the previous session after touching a session peak of $40.61.

The front-month contract for U.S. crude futures dropped 53 cents to $37.79 a barrel, after dropping to $37.74 earlier, the lowest since March 16. It settle up 4 cents in the previous session following a gain of 3 percent earlier in the session.

Prices will “zig-zag” for the rest of the year, said Tony Nunan, oil risk manager at Japan’s Mitsubishi Corp.

U.S. crude stockpiles rose by 2.3 million barrels to 534.8 million barrels in the week to March 25, the seventh week at record high levels, data from the U.S. Energy Information Administration shows.

But the increase was less than analysts’ expectations of a 3.3 million barrel build after crude imports fell 636,000 barrels per day (bpd) to 7.4 million bpd.

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

Crude prices, which have risen about 50 percent since mid-February, have started to track lower in the past week.

“Oil prices will trend down again … $35 a barrel will be the support level. Low prices are not sustainable in the long-run,” Nunan said.

But with OPEC flagging a price of $50 a barrel and oil producers scheduled to meet in Doha on April 17 to discuss a possible output freeze, prices are likely to remain range-bound.

“Anytime prices get close to $45-$50 a barrel, funds that have taken long positions are likely to take profits. Unless things really ignite the global economy, then people will sell-off at that level,” Nunan said.

In Asia, sustained weakness in oil prices is continuing to suppress upstream oil and gas production activity, consultancy BMI Research said in a report on Thursday.

Weaker oil prices are “limiting opportunities to stem natural declines in ageing assets and bringing new production sources online,” the report added.

Concerns over global oversupply were further fuelled after crude output from the Organization of the Petroleum Exporting Countries (OPEC) 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.

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 and Gopakumar Warrier)

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By Henning Gloystein

SINGAPORE (Reuters) – Crude futures rose on Monday after gaining over 15 percent last week, with some indicators pointing to the possibility the market could be bottoming out.

Brent futures had climbed almost half a dollar, or 1.2 percent, from their previous close to $35.51 a barrel by 0425 GMT on Monday.

U.S. West Texas Intermediate (WTI) crude futures were up 16 cents at $32.94 a barrel after gaining over 15 percent the previous week.

Analysts said that first signs of a stronger outlook were appearing after a 20-month rout that has seen prices fall by 70 percent.

“The U.S. crude market seems to have passed the worst point and crude runs should start creeping higher, taking pressure off inventory levels,” said Richard Gorry, director of JBC Energy Asia.

“The latest EIA data on U.S. production is also supportive as it indicates that the low prices are finally having an impact,” he said, referring to numbers from the U.S. Energy Information Administration.

U.S. shale producers cut oil rigs for a 10th week in a row to the lowest levels since December 2009, data showed on Friday, which analysts expect will lead to a production fall of 600,000 barrels per day this year.

Morgan Stanley said a potential Russian/Saudi agreement to freeze output at January levels could also drive prices.

“Russia said production freeze agreement discussions should end on March 1… Any news of progression could drive headlines and prices,” the bank said, but added that “we still question the efficacy of a freeze.”

Market data also suggests early signs of shifting sentiment.

The amount of open positions in WTI crude contracts that bet on a further fall in prices has fallen over 17 percent since mid-February to their lowest level in 2016, although by historic levels their amount remains high.

At the same time, financial speculators have sharply raised their bullish bets on oil after talk of a global production freeze and signs of falling U.S. shale crude output and growing gasoline demand.

Money managers raised their combined net long position in crude futures and options in New York and London by nearly 16 percent for the week ended Feb. 23, data by the U.S. Commodity Futures Trading Commission (CFTC) showed.

ING bank said that technical market indicators “could be the early warning sign of a coming trend change.”

Despite this, JBC’s Gorry said there was also “still a lot of downside risk” due to the huge overhang in production and stored supplies, which in the United States are at historic highs.

(Reporting by Henning Gloystein; Editing by Joseph Radford and Richard Pullin)

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By Henning Gloystein

SINGAPORE (Reuters) – Crude prices fell on Thursday as strong gasoline demand and lower U.S. crude output failed to counter downward pressure from global overproduction that has left storage facilities swelling with unsold oil.

The international Brent crude benchmark was trading at $34.18 per barrel at 0643 GMT, down 23 cents from its last close, hit by global oversupply that sees 1 million to 2 million barrels of crude produced every day above demand.

U.S. West Texas Intermediate (WTI) crude futures were down 23 cents to $31.92 per barrel.

“The basic overriding position in the oil market at the moment is that the global production exceeds global demand by quite a wide margin,” Said Ric Spooner, chief market analyst at CMC Markets.

In a sign of the excess supply, U.S. crude stockpiles rose 3.5 million barrels last week to reach an all-time peak above 507 million barrels, weighing on crude futures, data from the Department of Energy showed on Wednesday.

A slowing global economy may also increase the likelihood of low prices. Citi said global growth would be just 2.5 percent this year compared to a previous forecast of 2.7 percent.

“Global growth prospects are worsening further, with deterioration across advanced economies alongside previous weakness in emerging markets,” Citi economists wrote in a research note.

Despite the falls, there were some supportive indicators that briefly pushed oil prices on Thursday.

“It may be a little early to call it a trend but we are beginning to see some sign of cuts,” Spooner said, adding that U.S. output had fallen to about 9.1 million barrels per day, the same level as in October 2015.

“If we do start to see that (production) fall gradually from here that… might bring a bit of stability to the market,” he said.

Strong U.S. demand for gasoline supported crude on Wednesday, although analysts said this effect would ease.

U.S. gasoline demand stood at 9.06 million barrels per day (bpd) during the week ending Feb. 19 compared with 8.6 million bpd in the week ending Jan. 22, the Energy Department said.

“In 2015 we saw, 0.4 million barrels per day of demand growth from gasoline because the fall in oil prices is passed on to the consumer. This year, we’ve got growth normalizing to less than 0.1 million barrels per day,” said Virendra Chauhan, oil analyst at Energy Aspects in Singapore.

(Additional reporting by Manesha Pereira; Editing by Joseph Radford and Christian Schmollinger)

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By Keith Wallis

SINGAPORE (Reuters) – Crude futures rose in Asian trade on Thursday after Iran welcomed plans by Russia and Saudi Arabia to cap production, although analysts said the move would not lead to any output cuts and Tehran offered no action of its own.

After oil prices rose in the previous session as much 8 percent, commentators suggested markets had overreacted to Iran’s support for the caps and said the Russian-Saudi move would not likely reduce the global surplus.

“I share the consensus view that producers are unlikely to reach an agreement (on cuts), the rationale being the need to satisfy two conditions,” said Ric Spooner, chief market analyst with Sydney’s CMC Markets.

“First, any price gains must offset losses achieved from volume cuts – production cuts must be meaningful – sufficiently large to achieve a substantial price increase. And they will have to involve everybody – all the major (producer) players. That will be difficult to achieve,” he said.

Brent futures <LCOc1> rose 42 cents to $34.92 a barrel by 0555 GMT, having closed 7.2 percent higher in the previous session after hitting an intraday high of $34.99.

U.S. crude <CLc1> gained 50 cents to $31.16 a barrel, having finished 5.6 percent higher in the previous session after touching a high of $31.49.

Oil prices would likely remain volatile, Spooner said, as traders and investors reacted to news and rumours about curbs on output growth and possible cuts in production.

Iranian Oil Minister Bijan Zanganeh met counterparts from Venezuela, Iraq and Qatar on Wednesday but did not say if Iran would cap its output in keeping with the move by Russia, Saudi Arabia and Iraq.

“The agreement will do little to reduce the current supply glut,” BMI Research said in a note on Thursday.

A rebalancing in supply and demand is more likely in the second half of 2016, BMI said.

Iran’s OPEC envoy Mehdi Asali said it was “illogical” to ask Iran to freeze production levels in comments to the Shargh daily newspaper before the talks on Wednesday.

Iran exported around 2.5 million barrels per day (bpd) of crude before 2012, but sanctions, imposed by world powers to curb Tehran’s nuclear programme, cut its oil shipments to about 1.1 million bpd.

The sanctions were lifted last month, allowing Iran to resume selling oil freely in international markets.

Oil prices also gained support after U.S. crude stocks unexpectedly fell by 3.3 million barrels last week to 499.1 million, data from the American Petroleum Institute showed on Wednesday.

“We continue to eye crude production and would think that it should start to decrease. Should this happen, we would think that this could be the start of U.S. production cuts due to low oil prices,” Singapore’s Phillip Futures said in a note.

Analysts had expected crude inventories to climb by 3.9 million barrels in the week to Feb. 12, according to a Reuters poll on Tuesday.

Oil prices may gain further direction when the Department of Energy’s Energy Information Administration releases official oil inventory data later on Thursday.

(Reporting by Keith Wallis; Editing by Tom Hogue and Gopakumar Warrier)

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