LONDON: Brent crude oil extended losses to fall below $60 a barrel on Wednesday after a much larger-than-expected build in US crude stocks, while Saudi Arabia's oil minister said he expected the market to balance itself and prices to recover.
The US Energy Information Administration said US crude stocks jumped by 10.3 million barrels last week, more than double the amount predicted by analysts and the eighth weekly rise in succession. US crude inventories are at a record high.
Stocks at Cushing, Oklahoma, rose by 536,000 barrels, less than anticipated but still another increase at the US crude contracts delivery point. Gasoline stocks were largely unchanged while distillates fell by 1.4 million barrels.
April Brent fell $1.46 to $59.56 by 1538 GMT, dropping below the $60 level shortly after the EIA data. It had risen 2.5 percent on Tuesday.
US crude futures were down 70 cents to $49.82 a barrel, with their discount to Brent narrowing to less than $10 a barrel.
Oil faced additional pressure from a stronger dollar as the US currency rose to its highest since September 2003 against a basket of currencies, making commodities priced in dollars more expensive.
Earlier in the session, the market had received some support from Saudi Arabian Oil Minister Ali al-Naimi, who said he expected supply and demand would soon reach balance, and oil prices, which hit a near six-year low of $45 in January, would stabilise, adding to signs that OPEC's largest exporter sees consumption growing. "I hope and expect supply and demand to balance and for prices to stabilise," Naimi said in a speech in Berlin.
"Global economic growth seems more robust." OPEC decided not to cut output last year and let prices fall as it moved to defend its share of the market against fast-growing US shale output. Naimi said it was not Saudi Arabia's responsibility to "subsidise" higher-cost oil producers.
The speech followed news that Saudi Arabia had raised its official selling prices (OSPs) for oil deliveries to Asia and the United States on Tuesday.
"This is a sign that prices have bottomed out because it means Saudi is confident in raising prices without being afraid of losing market share," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
Major powers' talks with Iran over its nuclear programme were also in focus, as a deal could release more Iranian oil to the market after years of sanctions.
"There are still significant gaps and important choices that need to be made," US Secretary of State John Kerry told reporters after more than 10 hours of talks in Switzerland with his Iranian counterpart, Mohammad Jawad Zarif.
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