Oil down as US crude stocks continue surge; Brent under $55

NEW YORK (Reuters) - Oil prices fell on Wednesday after U.S. stockpiles hit new record highs, and analysts said the market could shed more of the rebound seen over the past two weeks that came on expectations of lower output.

U.S. crude inventories rose almost 5 million barrels last week, versus a near 4-million-barrel build forecast in a Reuters poll, to reach nearly 418 million barrels, the highest record keeping began in 1982, government data showed.

The strong build was a sign the market was still struggling to find a home for some two million barrels per day of oil which have prevented prices from forming a bottom to the selloff that began in June.

"It proves that the price retracement we had on the capital expenditure cuts and falling rig counts may have been premature," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.

Benchmark Brent (brent.167)oil was down $1.38 at $55.05 a barrel by 11:40 a.m. EST, hitting a session low of $53.91 earlier.

U.S. crude posted a 70 cent decline to $49.32, after an intraday low of $48.05.

Both Brent and U.S. crude prices have rebounded by more than 10 percent since Jan. 29, after a 60 percent rout in seven previous months.

Wall Street bank Goldman Sachs, one of the most influential voices in oil trading, reiterated its view on Wednesday that lower oil prices will be required over the coming quarters to ensure a slowdown in U.S. crude production.

(Additional reporting by Robert Gibbons in New York, Jack Stubbs in London, Meeyoung Cho in Seoul and Adam Rose in Beijing; Editing by Ruth Pitchford, Louise Heavens and Chris Reese)

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