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SYDNEY, Mar 16 (Reuters) Oil slipped below $62 a barrel on Thursday after a fifth weekly build in swollen U.S. crude stocks knocked prices 1.5 percent lower a day ago.

U S crude dropped 22 cents to $61.95 a barrel, adding to Wednesday's 93 cent fall that ended a two-day rally. Brent crude fell 33 cents to $62.61 a barrel.

The U.S. Energy Information Administration said in its weekly report on Wednesday that crude inventories rose 4.8 million barrels last week, beating expectations of a 2.7 million barrel climb.

''News of a fifth consecutive weekly stock build is putting a general weight on oil prices,'' said Justin Smirk, senior economist at Westpac in Sydney.

Stocks on the U.S. Gulf Coast, the hub of the oil industry for the world's biggest energy consumer, are now at their highest since 1990, and may be close to full capacity, the EIA added.

The impact on crude prices was cushioned by a fall in fuel inventories hit by extensive refinery maintenance as companies ush to meet new, cleaner fuel specifications.

''Gasoline inventories are a near-term positive for crude prices as refiners implement environmental standards before the summer driving season begins,'' said Westpac's Smirk.

U.S. distillate stocks fell 3.9 million barrels last week, while gasoline slipped 900,000 barrels. But fuel stocks are still well above normal, and refinery runs rebounded 2.7 percentage points to 85.7 percent of capacity on the week.

Gasoline futures fell 1.2 percent on Thursday to $1.8075 per gallon, down about 4 percent from Tuesday's five-month high struck on news of a refinery outage.

NARROW RANGE Oil prices have traded in a narrow $60-$63 band for most of the past four weeks, double where they were two years ago but well below last year's record highs near $71.

Fears about the thin level of spare global production and refining capacity, as well as geopolitical friction in major producers, have kept prices firm in spite of the build-up in U.S.

inventories to their highest since 1999, when oil was trading at around one-third of its current levels.

''With a market that has become so conditioned to think about low spare capacity at refineries and the wellhead, combined with a hypersensitivity to any actual or perceived supply disruption, prices are likely to remain firm to firming during the spring,'' said First Energy Capital analyst Martin King.

''At this stage, it still remains a question of when, not if, crude oil prices reach $70 per barrel.'' Swelling stocks may be the result of oil companies building up bigger permanent buffers to guard against what they see as the rising risk of a supply disruption, moving away from several years of just-in-time inventory policy, some analysts say.

Militant attacks in Nigeria have forced the shut-in of 556,000 barrels per day of crude production, with some uncertainty remaining about when normal output will resume.

As ministers from the world's top energy players meet in Moscow to discuss long-term energy security, Iran is holding a defiant line on enriching uranium for a nuclear energy industry.

Tehran has so far ruled out halting oil sales in response to potential U.N. sanctions. But Japan's biggest refiner Nippon Oil said on Wednesday it had cut imports from Iran due to the heightened political risk there.

REUTERS DKS VC1328