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Oil down on stock buildup
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January 13, 1999: 10:59 a.m. ET
Rise in U.S. inventories and easing Middle East tension pressure prices
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London (CNNfn) - Oil prices fell for the second successive day Wednesday as a rise in U.S. supplies suggested that the world remains awash with crude despite freezing temperatures in the United States.
Oil analysts said a less hostile tone by Iraq toward its neighbors was also weighing on the oil market. Tensions in the Middle East, origin of the bulk of the world's crude oil reserves, normally boosts prices.
International benchmark Brent fell 26 cents a barrel in late London trade to $11.22, extending Tuesday's losses of more than 50 cents.
The losses came as American Petroleum Institute (API) data issued Tuesday showed that both crude and refined product inventories in the world's biggest consumer market rose to record levels.
U.S. crude stocks increased by three million barrels following a dramatic 15 million barrel draw last week.
Oil analysts said the market's weakness was exacerbated by diminishing hope for an emergency meeting of the Organization of Petroleum Exporting Countries (OPEC) before its scheduled March 23 meeting.
"The rise in U.S. inventories and decreasing tension in the Middle East are behind the fall in oil prices,'' said Leslie Nicholas, oil analysts at GNI Ltd. in London.
He expects prices to remain low unless OPEC resorts to a fresh round of output cuts.
Analysts say Saudi Arabia, the world's largest crude producer and exporter, is opposed to an early meeting, which could lead to Iran demanding a rise in its output quota.
Iran, OPEC's second largest producer, is pumping at least 200,000 barrels above its official daily quota, according to Nicholas. 
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