LONDON: Oil prices fell on Wednesday, returning some of the gains made in one of the year's biggest rallies a day earlier, after weekly US crude stocks rose beyond expectations and a strong dollar weighed on commodities.
Global benchmark Brent crude was down 34 cents at $46.61 a barrel at 1410 GMT. It closed Tuesday 5.7 percent higher on news that members of the Organization of the Petroleum Exporting Countries would renew efforts to limit production. US crude was 45 cents lower at $45.36 a barrel.
"Prices are down on the build in US crude oil stocks reported by the API last night," said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.
A strong dollar also weighed on oil, with the index measured against a basket of currencies hitting a 14-year high.
Weekly US crude oil stocks surged by 3.6 million barrels last week, the American Petroleum Institute (API) industry group said, exceeding analyst expectations of a 1.5 million barrel rise. Official US government oil stocks data will be published later on Wednesday.
The news dampened a rally infused by news that OPEC members were meeting ahead of an official group gathering on Nov. 30 to build consensus for a deal to limit output, and by oil pipeline attacks by militants in Nigeria.
A number of energy ministers from OPEC countries are likely to meet informally in Doha on Friday to try to build consensus over decisions taken by the full group in September in Algiers, an Algerian energy source said.
However, Iran's oil minister will not be attending, sending the country's OPEC governor instead, sources said.
"We estimate the possibility of an actual OPEC production cut as 50-50," said Hans van Cleef, senior energy economist at ABN Amro. "If OPEC would stick to its intention to set its production ceiling at 32.5 million barrels a day, or even lower, market optimism will likely pick up, which could be supportive for oil prices."
The Dutch bank lowered its oil price forecasts on Wednesday, expecting Brent and US crude to average $50 a barrel in the fourth quarter.
In a bullish signal for the oil market, the International Energy Agency (IEA) said on Wednesday oil consumption will peak no sooner than 2040 despite the entering into force of the Paris climate deal which intends to wean the world off fossil fuels by the end of the century.
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