* Kuwait says OPEC discussing output increase
* Brent premium over WTI falls below $8 from $17 last week
* Coming up: EIA oil data, 10:30 a.m. EST Wednesday
(Updates with API inventory report, additional details)
By Robert Gibbons
NEW YORK, March 8 (Reuters) - Oil prices slipped on
Tuesday, with Brent falling nearly 2 percent, after Kuwait's
oil minister said OPEC was considering a production boost as
war-torn Libya's output remained disrupted and the region's
unrest fueled concerns about more supplies being cut off.
The Organization of the Petroleum Exporting Countries has
left official policy steady for more than two years, but
analysts have said output has been informally rising. []
Saudi Arabia has offered to help make up for Libya's shut
output, estimated at about 1 million barrels per day of its
normal 1.6 million bpd.
Brent crude for April delivery <LCOc1> fell $1.98 to settle
at $113.06 a barrel, having fallen as low as $112.13.
U.S. crude futures for April delivery <CLc1> fell 42 cents
to settle at $105.02 a barrel, above an early $103.33 low.
"The market is now waiting for the next piece of news to
unfold," said Harry Tchilinguirian, head of commodity markets
strategy at BNP Paribas.
"A turn for the worse for the market would be oil
infrastructure being hit as a result of the fighting. The
demise of the current regime or a more forceful statement from
OPEC followed by an increase in production would be significant
too."
Brent's premium to the U.S. benchmark West Texas
Intermediate crude <CL-LCO1=R> ended post-settlement trading
down $1.79 at $7.96 a barrel, down from a record of more than
$17 last week. []
U.S. gasoline <RBc1> and heating oil <HOc1> futures settled
lower, slumping with the Brent contract. High U.S. gasoline
prices may be hitting retail demand, which fell 1.8 percent
last week against the previous week and was lower against a
year ago, MasterCard said. []
U.S. OIL INVENTORY REPORTS
U.S. crude stockpiles rose 3.8 million barrels last week,
with gasoline stocks falling 3.7 million barrels and distillate
stock dropping 1.5 million barrels, the industry group American
Petroleum Institute said in a report released late Tuesday.
[]
Oil futures prices showed little reaction to the API data.
A Reuters analyst survey ahead of the API report yielded a
forecast for crude stocks to be up 400,000 barrels, distillates
down 600,000 barrels and gasoline stocks down 1.5 million
barrels last week. []
The U.S. Energy Information Administration (EIA) will issue
the government's oil data at 10:30 a.m. EST (1530 GMT).
OPEC TALKS PRODUCTION BOOST
"We are in consultations about a potential output
increase," Kuwait's Sheikh Ahmad al-Abdullah al-Sabah told
reporters. But he added that the group had taken no decision
yet to produce above existing output targets. []
Saudi oil minister Ali Al-Naimi and others in OPEC said
world oil markets were sufficiently supplied. Naimi said the
kingdom held 3.5 million bpd of spare production capacity to
meet any shortages. []
Algeria's oil minister said he sees no supply deficits and
Iran's OPEC governor downplayed the discussions, saying
consumer worries were mostly "psychological." []
With protesters in Kuwait gathering on Tuesday and calls
for more Saudi protests later this month, investors remain on
edge about unrest in the region. []
Investment bank Goldman Sachs raised its oil price forecast
and said it believed Saudi Arabia already had used up more of
its surplus capacity than is widely thought. []
U.S. crude prices will average $102 a barrel in 2011, the
U.S. EIA said, raising its forecast by $9 from February.
[] []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FACTBOX on emergency oil stockpiles: []
Graphics on U.S. strategic oil reserve, U.S. and other IEA
nations' reserves: http://link.reuters.com/cah48r
Graphics showing:
Middle East unrest http://r.reuters.com/nym77r
Oil price shocks http://r.reuters.com/qes28r
Those most reliant on oil http://r.reuters.com/dux28r
OECD commercial oil stocks http://link.reuters.com/qyg48r
Brent and WTI open interest http://r.reuters.com/cag48r
Graphic of U.S. oil stocks: http://r.reuters.com/sup48r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
BATTLE FOR LIBYA
Libyan government forces attacked rebels on western and
eastern fronts, intensifying their offensive to crush the
revolt against Muammar Gaddafi. []
U.S. President Barack Obama and British Prime Minister
David Cameron conferred by telephone and agreed "to press
forward with planning ... on the full spectrum of possible
responses," including a no-fly zone. []
(Additional reporting by Gene Ramos in New York, Nia Williams
and Christopher Johnson in London and Alejandro Barbajosa in
Singapore; Editing by Marguerita Choy)
