* U.S. crude stocks seen up in EIA data due on Wednesday
* OPEC says it may cut oil production further
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, Feb 4 (Reuters) - Oil edged a little higher towards
$41 a barrel on Wednesday despite the expectation weekly U.S.
data will show a build in crude stockpiles as demand for energy
in the world's biggest oil consumer declines.
The move was supported by signals from the Organization of
the Petroleum Exporting Countries that it may cut oil production
further in an attempt to bolster the market.
U.S. light crude for March delivery <CLc1> rose 8 cents to
$40.86 a barrel by 0938 GMT. It is down more than 50 percent
from a year ago.
London Brent crude <LCOc1> was 8 cents up at $44.16 a
barrel.
"The economic context remains very weak and the market is
waiting for U.S. oil data later today," said Harry
Tchilinguirian, oil analyst at BNP Paribas in London.
"Surprise builds in product inventories will only validate
assessments of underlying weak oil demand."
Oil has plummeted by more than $100 since hitting a record
near $150 a barrel in July last year as the global downturn has
weighed on demand for fuel.
The U.S. Energy Information Administration will release its
oil data at 10:30 a.m. EST (1530 GMT).
A Reuters poll of analysts forecast the report would show
that U.S. inventories of crude oil rose for the sixth straight
time last week as refinery utilisation was curbed by seasonal
maintenance, rising imports and falling demand. []
BIG BUILD
Crude supplies were projected to have risen 2.8 million
barrels in the week to Jan. 30. The poll forecast a
1.3-million-barrel drawdown in distillate stocks, which include
heating oil and diesel, and a 600,000-barrel increase in
gasoline inventories.
On Tuesday, the American Petroleum Institute (API) said U.S.
crude oil stocks jumped 8.1 million barrels last week. Oil
traders and analysts generally consider the API report to be
less credible than EIA data. []
"The unexpectedly big build in crude in the API stats is the
driver at the moment and I expect today's data to show another
big build in crude stocks," said Christopher Bellew, broker at
Bache Commodities in London.
OPEC is deeply worried by the impact the global economic
downturn is having on oil demand and has promised to reduce oil
production by a total of 4.2 million barrels per day (bpd) from
levels seen in September.
OPEC President Jose Botelho de Vasconcelos, who is also
Angola's oil minister, told Reuters on Tuesday the 12-member
group could remove more oil from the market if needed to boost
prices. []
OPEC in January met only two thirds of its pledge to lower
oil output as several members of the producer group continued to
pump above target levels, a Reuters survey showed. []
There is little sign of an improvement in oil demand.
On Tuesday, weak retail sales in the United States and
Germany, as well as a jump in Spanish unemployment, provided the
latest evidence of a severe, synchronised recession.
News that about 30,000 unionised workers at U.S. refineries,
chemical plants and pipelines reached a deal with industry on a
new basic contract on Tuesday, averting a nationwide strike,
failed to pressure prices.
The oil market has been in contango, with oil for delivery
next March a third pricier than for the March this year,
creating a chance for traders to profit from storing crude for
later use.
(Additional reporting by Annika Breidthardt in Singapore;
editing by William Hardy)
