A rare first quarter stock build this year has glutted oil storage tanks, blunting the effect of this month's ground-breaking pact by Opec and non-Opec producers to cut back output.

The low pulse of spring demand, when global stocks traditionally are built, means there is little immediate respite for producers on the horizon, analysts say.

"We are looking at a build of 2.5 million barrels per day (bpd) through the second and third quarters," said Peter Bogin of consultants Cambridge Energy Research Associates in Paris.

Washington-based consultants Petroleum Finance Company (PFC) predict a second quarter stock build of 1.6 million bpd after 2.5 million in the first.

"The production cut appears to be too small to shrink the second quarter surplus in the crude oil market," PFC said in a report.

Lack of storage space means thatcrude sellers are having to force oil out onto prompt markets, traders say, depressing prices further.

Oil markets have been drenched by a collapse in Asian demand and a mild winter, in tandem with rising Opec output which peaked at 29 million bpd in March.

Producers' subsequent cutback pact initiated by Saudi Arabia, Venezuela and Mexico reversed some of the price losses which took Brent in March below $12 a barrel for the first time in nine years.

But the global glut of prompt oil has since pushed Brentback to around $14.Stock levels in Japan, the United States and Europe are already 100 million barrels higher than this time last year, says PFC, part of an 800,000 bpd world stockbuild so far this year.

The previous first-quarter stock build was eight years ago.

Inventories have also been rising throughout the supply chain through to end-users as producers and lifters battle to keep oil off prompt markets."The rising surplus...seems to have been accelerated during March as evidenced by the level ofoil at sea and in European and Caribbean independent storage," the PFC report adds.

While inventory figures for countries outside the Organisation for Economic Cooperation and Development (Oecd) are often murky, analysts say they too show major gains. Cambridge Energy's Bogin estimates that non-Oecd stocks are anywhere between 250 million and 350 million barrels higher than this time last year.

Market watchers see little prospect of a revival in Asian demand to help drain inventories. "We've already halved our growth forecast for the region to two percent this year, taking off around 400,000 bpd," said an analyst with a merchant bank.

"That's against Asian growth of around six per cent in recent years," he added.

There are also widespread doubts over producers' resolve to implement production cuts. Russia's recent 60,000 bpd commitment has brought pledged reductions up to a total 1.725 million bpd.

But New York-based consultants PIRA Energy believe that actual cuts will take no more than 900,000 bpdout of the market with just 700,000 bpd from Opec.

Meanwhile, prospects that a sudden disruption to Iraqi supply could erase the oversupply have receded, as relations improve over UN weapons inspections.

UN-monitored Iraqi exports rose to 1.3 million bpd in March and with technical assistance could reach two million within a matter of months.The weight of the oil already in storage means any cut in supply will take several months to filter through to higher prices, the analysts say.

Big discounts for prompt prices versus forward loadings encourages traders to store. Only when supply has been cut back enough to restore the balance between prompt and forward prices will storage be deterred.

Yet some analysts believe the market's slow turn has already started. Robert Mabro of the Oxford Institute for Energy Studies argues that producers have already had to shoulder some cuts, as recession-hit Asian customers without letters of credit have cancelled liftings in recent months. Perhaps the best hope for aswift market recovery comes from the United States, easily the world's largest oil importer. PFC expects second quarter demand to rise by 1.7 per cent as the driving season gets going. The US department of energy said on Wednesday the low oil price was expected to lead to the highest annual increase in a decade in US highway travel and gasoline demand during this summer's driving season.

It said highway travel was expected to jump 3.8 per cent and gasoline demand to increase by 2.8 per cent.