By Keith Wallis
SINGAPORE (Reuters) – Oil futures extended losses into a third session in Asian trade on Wednesday, as U.S. crude stocks last week surged to more than half a billion barrels & as Iran plans to boost exports from March.
Milder weather forecast for the last eight weeks of the U.S. November-March winter heating season has moreover dampened demand hopes.
p>Brent for April delivery <LCOc1> had dropped 25 cents to $32.47 a barrel as of 0204 GMT (9:04 AM EDT), after settling down $1.52, or 4.4 percent.
U.S. crude, moreover known as West Texas Intermediate (WTI) <CLc1>, fell 27 cents to $29.61, after ending the previous session down $1.74, or 5.5 percent.
"Oil prices are coming off again. Prices are going to zig-zag for a while," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
U.S. crude stocks rose by 3.8 million barrels to 500.4 million in the week to Jan. 29, data from industry group, the American Petroleum Institute showed on Tuesday.
Weekly inventory data from the U.S. Department of Energy's Energy Information Agency is due after on Wednesday.
"The (global) inventory situation is going to obtain worse in the second quarter as we hit the peak refining rate at the end of this quarter," Nunan said.
"(But) this has been so well documented that its been built into prices. I do think we're close to the bottom & the bottom in prices will be this quarter."
Nunan forecast Brent would trade in a $25-$35 a barrel range in the first quarter & then slowly recover over the rest of the year.
Crude stocks at the Cushing, Oklahoma, delivery hub rose by 141,000 barrels, the API said.
The increase led to renewed fears of overflowing oil tanks at the key U.S. storage hub, causing the spread between prompt & forward U.S. crude oil futures to slump to an 11-month low.
"The U.S. crude inventory is already at the highest levels since (the) 1930s," ANZ analysts said in a note on Wednesday.
Traders fear that filling tanks to the brim could cause the next leg of a rout on distressed selling.
Meanwhile, Iran is aiming for crude exports of 2.3 million barrels per day in the fiscal year beginning on March 21, the managing director of the National Iranian Oil Company was quoted as saying on Tuesday.
That is higher than the 1.44 million bpd Iran is expected to export in February & 1.5 million bpd in January, according to data on Iran's preliminary tanker loading schedules.
Russia is ready to implement further cooperation in the oil market with OPEC & non-OPEC countries, Russian Foreign Minister Sergei Lavrov said on Tuesday.
(Reporting by Keith Wallis; Editing by Joseph Radford)
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