* Crude stocks expected to have fallen 2.9 million barrels
* Forecasts for warmer US weather pressure oil prices
* Coming up: API U.S. inventory data, 2130 GMT
(Updates prices)
By Randy Fabi and Dmitry Zhdannikov
LONDON, Dec 29 (Reuters) - Oil steadied near a two-year high
around $91 a barrel on Wednesday ahead of U.S. inventory data
expected to show a drawdown in crude and distillate stocks in
the world's largest oil user.
NYMEX crude for February delivery <CLc1> edged down 39 cents
to $91.10 a barrel at 1404 GMT, while ICE Brent crude <LCOc1>
was down 43 cents at $93.95. Both contracts pared previous
modest gains as the dollar strengthened from earlier in the day
and on forecasts for warmer weather in the United States.
U.S. oil prices had climbed to a 26-month high of $91.88 on
Monday due to cold weather on both sides of the Atlantic, a weak
dollar and OPEC statements that it saw no need for an urgent
meeting to boost output.
"Investors are especially keen to follow whatever factor is
most supportive of prices moving higher," said analysts at
Cameron Hanover in a research note.
Bullish money managers had stormed into the oil market to
set a fresh record high for net long crude positions on the New
York Mercantile Exchange. []
Oil's rally also looked secure due to rhetoric from several
OPEC ministers, who last weekend signalled $100 was a fair
price. []
The rise in oil, however, took a breather on Wednesday on
mixed U.S. economic data and a strengthening dollar.
"The stock market is strong and there are a lot of calls for
the S&P 500 to reach next year close to a new all-time high, but
such great enthusiasm when housing data have for months not
shown any signs of improvement is worrying," said Olivier Jakob
from Petromatrix.
U.S. consumer confidence unexpectedly deteriorated in
December, while prices of single-family homes fell by almost
double the expected pace in October. []
For a graphic on asset returns in 2010
http://graphics.thomsonreuters.com/F/12/GLB_MKTQ410.html
Crude slightly underperformed stocks on Wednesday <.SPX> as
U.S. temperatures were forecast to return to average or warmer
than average. [] []
DROP IN U.S. INVENTORIES
JBC Energy analysts said in a note oil prices were supported
by potential drawdowns to be shown by U.S. inventory reports.
"Attention should be paid to gasoline, with U.S. retail
sales of the transportation fuel climbing by 4.6 percent last
week (week-on-week, MasterCard)," said JBC.
The icy weather has boosted distillate needs, which includes
heating oil and diesel fuel, and U.S. distillate stocks were
expected to have fallen 500,000 barrels last week, a Reuters
poll showed. []
Crude inventories in the world's biggest economy were pegged
to have fallen 2.9 million barrels, while gasoline stocks were
seen up 1.5 million barrels.
The American Petroleum Institute is expected to report its
weekly inventory data later on Wednesday, delayed by a day due
to the Christmas holiday. The U.S. Energy Information
Administration (EIA) will issue its weekly report on Thursday.
The dollar index, which tracks the greenback's performance
against a basket of major currencies, was down 0.15 percent at
1407 GMT, having recovered from minus 0.26 percent earlier on
Wednesday.
Technicals point to oil prices consolidating between $90.12
and $91.50, with a bias towards a drop to $90.12, according to a
Reuters market analyst. []
(Editing by Keiron Henderson and Jane Baird)
