Oil falls to $87 on large U.S. fuel stocks build

Oil fell to $87 on Wednesday after a larger-than-expected build in U.S. crude stocks and growing fears of a U.S. recession. U.S. light crude for March delivery fell $1.31 to $87.10 a barrel by 1548 GMT, adding to losses of nearly 2 percent the previous session. London Brent crude dropped 85 cents to $87.97. U.S. crude stocks rose 7 million barrels last week, the Energy Information Administration said, surpassing analysts' expectations for a 2.6 million barrel build. Gasoline supplies climbed 3.6 million barrels to their highest level since February 1994, while distillates rose 100,000 barrels, the EIA said. "These numbers are all bearish," said Tim Evans, analyst at Citigroup Futures Research. "Inventories were up across the board, implied demand looked terrible." Fears the U.S. will slide into a full-blown recession in the wake of a housing slump and the resulting credit crunch have dampened the outlook for global energy demand growth, pulling oil back from a record-high above $100 a barrel hit in early January. "The U.S. economy just attracts more bad news and demonstrates its fragility," said Robert Laughlin of MF Global. "For oil, demand will slip and prices should come under renewed pressure in the short-term." Forecasts for normal or slightly above normal temperatures in the U.S. Northeast for the next six to 10 days were also keeping a lid on oil prices. The Organization of the Petroleum Exporting Countries (OPEC) could keep output at current levels when its ministers meet next month if there is no change in the market, Secretary-General Abdullah al-Badri said on Tuesday. OPEC's concerns about slowing global demand prompted the group to keep supply steady at last Friday's meeting and some hawkish members have called for a vote to cut output at its March 5 meeting.