(Adds OPEC comments, updates prices)
By Jane Merriman
LONDON, March 3 (Reuters) - Oil prices eased on Monday,
pressured by concerns over the ailing U.S. economy, but
supported by a weak dollar and expectations OPEC will not change
oil output when it meets this week in Vienna.
U.S. light crude for April delivery was down 16 cents at
$101.68 a barrel by 1340 GMT.
London Brent crude was 20 cents down at $99.90.
"We think there is a pretty solid consensus that the cartel
is likely to leave quotas unchanged," said Tim Evans, analyst at
Citi. "The high price level precludes a production cut that
might otherwise be needed to limit a projected second (quarter)
global supply/demand surplus."
Comments from members of the Organization of the Petroleum
Exporting Countries (OPEC) have mostly suggested the producer
group will not change output, rebuffing calls from the U.S. to
pump more oil to cool record prices of more than $100 a barrel.
Ecuador's Oil Minister Galo Chiriboga told Reuters on Monday
that OPEC does not need to change its oil output, echoing
similar comments by a succession of ministers and officials.
However, one OPEC source said the producer group may discuss
a small increase of 500,000 barrels a day citing high oil
prices, while reiterating that fundamentals in the market did
not support an increase in output.
"It seems that things are going to be as is," Libya's top
oil official Shokri Ghanem told reporters on Sunday as he
arrived in Vienna for OPEC's meeting on March 5.
SAME OLD ISSUES
Tensions in the Middle East, South America and Nigeria lent
support to prices.
"The issues are not new but they have the potential to blow
up and cause supply disruptions," said Rowan Menzies, head of
research at Commodity Warrants Australia.
OPEC members Venezuela and Ecuador sent troops to their
borders with Colombia after Colombia bombed rebels inside
Ecuador. []
In Nigeria, attackers blew up a police houseboat on Bonny
Island, an oil and gas export hub in southern Niger Delta.
A fall in the U.S. dollar to record lows against a basket of
currencies <.DXY> also helped underpin the market.
Crude oil is priced in U.S. dollars so when the U.S.
currency declines oil prices often rise to reflect that.
The weak dollar is anticipating more interest rate cuts from
the U.S. Federal Reserve to revive the economy in top oil
consumer the United States. European stock markets had a shakey
start on Monday due to renewed fears of a U.S. recession and
concerns over the banking sector. []
The dollar, supply disruptions from Ecuador and a fire at a
European natural gas terminal helped drive oil to a record
$103.05 on Friday.
"From an oil perspective, this rally like that across the
commodity sector, remains rampant as funds/specs continue to
seek safer havens from an ailing equity market," said Robert
Laughlin, analyst at broker MF Global.
Crude speculators on the New York Mercantile Exchange
increased net long positions last week to the highest in seven
weeks, according to data from the Commodity Futures Trading
Commission released on Friday.
(Additional reporting by Fayen Wong in Sydney; editing by James
Jukwey)
