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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SINGAPORE (Reuters) – Gold bounced back on Monday, inching closer to last week’s 13-month high as the dollar remained under pressure ahead of the U.S. Federal Reserve’s policy meeting.

The U.S. dollar was at one-month lows against a basket of major currencies with the Fed seen almost certain to stand pat at this week’s policy review.

Spot gold had risen 0.5 percent to $1,254.70 an ounce by 0212 GMT, while U.S. gold eased 0.3 percent to $1,256 an ounce.

The main focus is the U.S. central bank’s policy meeting on March 15-16, after it lifted rates for the first time in nearly a decade in December.

Investors in the precious metals market are also looking at a Bank of Japan meet.

The BOJ’s policy board is set to discuss this week whether to exempt $90 billion in short-term funds from its newly imposed negative interest rate, people familiar with the matter said, after the securities industry warned that investment money would be driven into bank deposits.

“We have two central bank meetings this week as the BOJ commence a two-day meeting today and the FOMC announce their interest rate decision on Wednesday,” said MKS Group trader Sam Laughlin.

Support at $1,235 should keep the metal buoyant leading into the Fed announcement, while $1,275-$1,280 will likely cap any moves higher, the trader said.

After rolling out bold measures to boost the euro zone economies, including increased asset-buying and a deeper cut to deposit rates, ECB President Mario Draghi on Thursday signalled there would be no further rate cuts.

The relatively weak dollar and a repricing of expectations for U.S. interest rate rises have helped gold rebound by more than 18 percent this year.

Bullion regained its role as a shelter for risk-averse investors, in the face of tumbling equities and fears of a global economic slowdown.

Hedge funds and money managers increased their bullish position in COMEX gold to the highest in 13 months in the week to March 8, U.S. Commodity Futures Trading Commission data showed on Friday, as safe-haven buying lifted prices to the highest since February 2015.

Physical gold demand slowed in top consumer China last week, while a strike by jewellers protesting against the imposition of a tax curbed demand in No. 2 market India.

(Reporting by Naveen Thukral; Editing by Richard Pullin and Joseph Radford)

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