* U.S. crude oil inventory rise exceeds forecast - EIA
* U.S. dollar up against foreign currencies, pressuring oil
* U.S. refinery utilization down on plant maintenance
* After Chavez, Venezuela oil industry operates normally
(Updates with settlement)
By Joshua Schneyer
NEW YORK, March 6 Crude oil futures edged down
to $111 a barrel on Wednesday after U.S. government data showed
domestic crude inventories rose much more than forecast.
U.S. crude stocks rose by 3.83 million barrels in the week
to March 1, the Energy Information Administration said in its
weekly report. Analysts had forecast a 500,000-barrel build.
Inventories rose as refinery utilization fell during winter
plant maintenance season and in spite of a drop in imports to
the world's biggest oil consumer.
"This is all definitely putting some pressure on (crude oil)
in the short term. The refinery runs right now are down and the
build in inventories is rising," said Phil Flynn of Price
Futures Group in Chicago. "The crude market hasn't bottomed
Brent crude oil futures fell 55 cents to settle at
$111.06 per barrel after trading between $110.46 and $112.23.
U.S. light crude oil closed 39 cents lower at $90.43
after ranging between $89.55 and $91.17.
Another factor weighing on oil was a firmer U.S. dollar,
which gained 0.5 percent against a basket of foreign currencies
, making the greenback-denominated commodity more
expensive for non-U.S. buyers.
U.S. ECONOMIC DATA, VENEZUELA UNCERTAINTY
Some losses in crude were pared as the Dow hit another
record high on signs of improvement in the U.S. labor market.
Private U.S. employers added more jobs than expected in
February, according to a report from a payrolls processor.
Meanwhile, U.S. Commerce Department data showed that January
factory orders declined 2 percent, or a little less than a 2.2
percent consensus estimate by analysts in a Reuters poll.
Contributing to the fall was weaker demand for transportation
Oil traders also watched developments in Venezuela,
following the death of President Hugo Chavez on Tuesday after a
two-year battle with cancer.
Venezuelan authorities promised to hold a new presidential
election within 30 days, as stipulated by the constitution, but
set no firm date.
The country's oil industry was operating normally and no
disruption was expected, state oil company PDVSA said.
"Chavez's death will probably generate near-term,
understandable but most likely misplaced, concerns that
instability during the transition could threaten (oil) supply,"
said Robert McNally, an energy consultant and former U.S. White
House energy adviser.
"Medium term it may create hopes that better management of
the oil sector could reverse Venezuela's trend decline," McNally
(Additional reporting by Sabina Zawadzki and Dasha Afanasieva;
Editing by Bob Burgdorfer and Peter Galloway)