Oil price dips before US crude inventory data

OilReuters

(Reuters)

LONDON, Feb 27 (Reuters) - Oil dipped on Tuesday before weekly data that is forecast to show rising U.S. crude inventories, although investor confidence in OPEC's ability to curb output helped stem the price slide.

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Brent crude futures eased 6 cents to $67.44 a barrel by 1519 GMT, while U.S. West Texas Intermediate crude fell 12 cents to $63.79.

The American Petroleum Institute releases its weekly figures on U.S. crude inventories later on Tuesday. Stocks are forecast to have risen by 2.7 million barrels last week, according to a Reuters poll.

Inventories have fallen by more than 100 million barrels, or a quarter, in the last 12 months, to their lowest in three years. Seasonally, stocks tend to build in the first three months of the year.

But soaring U.S. production is upending global oil markets at a time when other major producers - including the Middle East-dominated Organization of the Petroleum Exporting Countries and Russia - have been withholding output to prop up prices.

The United States will overtake Russia as the world's biggest oil producer by 2019, International Energy Agency (IEA) Executive Director Fatih Birol said on Tuesday.

"U.S. shale growth is very strong, the pace is very strong ... The United States will become the No.1 oil producer sometime very soon," he told Reuters.

U.S. output was 10.27 million barrels per day (bpd), according to government data released on Thursday, higher than the latest figures for the world's largest exporter Saudi Arabia and just below Russia.

In addition to its weekly statistics, the U.S. Energy Information Administration will publish a monthly report on crude supply, which analysts expect to include substantial upward revisions to U.S. oil output.

"It is likely that the ... monthly data will show U.S. crude oil production in December about 200,000-300,000 bpd above what was estimated in the weekly reports," Petromatrix analyst Olivier Jakob said in a note.

A steadier dollar also undermined the crude oil market. A stronger U.S. currency can encourage investors to book profits on their holdings of dollar-priced commodities, stocks or bonds.

"Our technical analysts are saying (oil) is bearish unless we break above $67.70," SEB head of commodity strategy Bjarne Schieldrop said.

"It's been rejected exactly at that level ... and that is where the price action is today. It's at a level where it's a tie between 'back to bullish or back to bearish'."

(Additional reporting by Henning Gloystein and Osamu Tsukimori Editing by Dale Hudson and Edmund Blair)