By Barani Krishnan
NEW YORK (Reuters) - Oil prices fell around 2 percent on Thursday after industry data suggested a key pipeline shutdown had not reduced crude flows to the U.S. storage base by as much as expected.
Higher Iraqi oil exports also underlined the global oversupply situation despite a positive U.S. government report on Wednesday on U.S. crude supply-demand that drove prices up by 5 percent.
Market intelligence firm Genscape reported a build of 255,804 barrels at the Cushing, Oklahoma delivery hub for U.S. crude futures during the week to Tuesday, traders who saw the data said.
The build came despite TransCanada Corp having shut since Saturday its 590,000 barrels per day (bpd) Keystone crude pipeline that moves crude to Cushing and Illinois.
Genscape did note a 481,485-barrel decline at Cushing in the five days to Tuesday, apparently due to the Keystone shutdown that was caused by a potential leak, traders said. But that wasn't enough to offset total inflows for the week.
"I guess people were expecting even more impact from the Keystone closure," said a trader.
Brent futures (LCOc1) were down 85 cents, or 2.1 percent, at $38.99 a barrel by 10:41 a.m. EDT (1441 GMT).
U.S. crude futures (CLc1) slipped by 75 cents, or 2 percent, to $37 per barrel.
"We are in the aftermath of yesterday's (EIA) data, but if you zoom out there's still oversupply and record inventories," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
"Production numbers from places like Iran and Iraq are in focus with people looking to see how it translates into the overall supply picture."
U.S. crude inventories
Oil exports from Iraq's southern ports have risen to an average of 3.494 million barrels per day (bpd) in April, an official from the state-run South Oil Company said on Thursday. This was above the 3.286 million bpd average for March.