Oil extends gains, hovers near $102 on weak dollar

                                
 By Fayen Wong
                                
 PERTH, March 26 (Reuters) - Oil rose further on Wednesday
as a fall in the dollar and a recovery in other commodities,
such as gold, spurred renewed buying in energy markets.
                                
 U.S. light crude for May delivery <CLc1> rose 60 cents to
$101.82 a barrel by 0130 GMT, extending a 36-cent gain in the
previous session which ended a week of heavy sell-offs.
                                
 London Brent crude rose 51 cents to $101.11.
                                
 "The dollar's fall has prompted buying but traders are
reluctant to take large positions ahead of the end of the
quarter," said Shuji Sugata, a manager at Mitsubishi Corp
Futures and Securities Ltd in Tokyo.
                                
 "Crude is gaining support as equities prices are regaining
stability, but the technical trend is still weak after plunging
from record highs last week," Sugata said.
                                
 The dollar slipped on Wednesday, extending the steep
decline posted a day ago, as investors seized on a rebound in
gold and commodity prices as a cue to sell the U.S. currency.
                                
 Renewed calm in financial markets also prompted players to
sell the U.S. currency and buy gold and oil, betting that the
global economy will withstand an economic slowdown in the
United States.
                                
 Analysts said news that a worker strike in Gabon had halted
60,000 barrels of daily output from a Shell <RDSa.L> subsidiary
in the West African nation also encouraged oil's gains
[ID:nL25648000].
                                
 The market is now shifting its focus to the U.S.
government's weekly report on crude oil inventories to be
released at 1430 GMT.
                                
 Oil analysts polled by Reuters expect this week's
government data to show a third consecutive increase in weekly
U.S. crude oil stocks, up 1.7 million barrels. [EIA/S]
                                
 Gasoline stocks were forecast to show a draw of 800,000
barrels, while distillate stock were seen to fall 1.7 million
barrels.
                                
 Oil's modest gain on Tuesday snapped a three-day losing
streak that saw oil prices tumble about 10 percent in a week
after striking a lifetime high of $111.80 on March 17.
                                
 But some analysts said the recent correction in oil prices
could continue due to a bleak U.S. economic outlook, seasonal
weakness in crude demand on the back of a heavy refinery
maintenance schedule and weaker oil products demand as the
winter season ends.
                                
 Reports on Tuesday showed U.S. consumer' confidence plunged
to a five-year low on worries about rising inflation and fewer
jobs, with a record drop in house prices in January compounding
their woes. [ID:nN25377096]
                                
 U.S. government data released last week showed oil demand
in the world's biggest energy consumer down 3.2 percent from a
year ago, with inventories rising.
 (Additional reporting by Chikafumi Hodo in Tokyo)
 (Editing by Ben Tan)