* Oil slips after hitting highest level since October 2008
* Stronger dollar, EIA demand forecast weigh
* Coming Up: U.S. oil inventory reports from API
(Recasts, updates prices, changes quote, adds updated
inventory poll)
By Edward McAllister
NEW YORK, April 6 (Reuters) - Oil edged lower in choppy
trade on Tuesday, losing momentum after five consecutive rising
sessions as a stronger dollar lent pressure and investors
awaited weekly U.S. oil inventory data.
The U.S. Energy Information Administration cut its 2010
world oil demand growth forecast on Tuesday, which also weighed
on sentiment.
U.S. crude for May delivery <CLc1> fell 7 cents to $86.55 a
barrel by 1:21 EDT (1721 GMT), after earlier rising to $87.09,
its highest price since October 2008. In London, ICE Brent
<LCOc1> lost 2 cents to $85.86.
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COLUMN-Riyadh's resolve faces early test as oil rises: John
Kemp []
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"The EIA's lower growth forecast and the dollar probably
helped limit crude's rise after a five-day run," said Richard
Ilczyszyn, senior market strategist at Lind-Waldock in
Chicago.
The EIA cut its 2010 world oil demand growth forecast by
10,000 barrels per day from its previous estimate to 1.46
million bpd. []
Oil prices rose more than 2 percent on Monday after U.S.
manufacturing, home sales and jobs data boosted optimism about
a recovery in the world's top oil consumer.
A stronger dollar pressured crude on Tuesday. The euro fell
broadly after reports that Greece wants to amend a European
Union aid deal rekindled worries over Athens's deficit
problems. []
A stronger dollar denotes a move to safer havens from
assets deemed more risky, like commodities or equities.
"We're starting to come to a point where these oil prices
could start to put the economic recovery at risk. Whatever we
had last year was at an average $62 a barrel. It's another
thing to continue on the recovery path with $90 oil," said
independent oil analyst Olivier Jakob at Petromatrix in
Switzerland.
Big oil producers could face a test as oil heads well above
the $70-$80 range trumpeted by OPEC members this month as good
for them as well as consumer nations.
INVENTORY DATA
Oil market attention will shift to inventory statistics due
later on Tuesday from the American Petroleum Institute (API),
and on Wednesday from the U.S. Department of Energy's Energy
Information Administration (EIA).
Crude inventories in the United States probably gained for
a 10th consecutive week last week, an updated Reuters survey
showed on Tuesday. []
Crude stockpiles were forecast to have risen 1.8 million
barrels, according to a Reuters poll, while a 1.2 million
barrel drawdown was expected in distillate stocks comprising
heating oil and diesel, with an 800,000 million barrel draw
expected for gasoline. []
On Monday the EIA said U.S. gasoline prices rose to $2.88 a
gallon in the last week, the highest since October 2008.
"The recent spike can be largely put down to rising crude
oil prices. Compared to other products, gasoline demand is
quite price-sensitive, illustrated by the fact that it was the
only major oil product to show growth on a global basis last
year," analyst David Wech at JBC Energy wrote in a note to
investors.
(Additional reporting by Gene Ramos and Robert Gibbons in New
York, Chris Baldwin in London, Alejandro Barbajosa in
Singapore; editing by Jim Marshall)
