Oil dips under $72; awaits U.S. stock data, OPEC

SINGAPORE, May 31 (Reuters) Oil prices edged back below on Wednesday, giving up some of the previous day's gains on forecasts for a further rise in U.S. gasoline stocks and OPEC's pledge to keep crude oil output flowing full throttle.

U.S. crude for July delivery shed 20 cents to .83 a barrel by 0356 GMT, a day after prices rose 66 cents to their highest close in two-and-a-half weeks, aided by data showing a leap in oil demand from number two consumer China.

Prices are tracking back toward April's record-high of .35 a barrel amid ongoing anxiety over Iran's stand-off with the West and a tentative recovery in other commodity markets.

Focus shifts later this week to supply data from the world's top consumer, with U.S. gasoline stockpiles expected to have risen by 1.4 million barrels last week, a fifth consecutive build, a preliminary Reuters poll showed.

The data will be released on Thursday, a day later than usual due to Monday's holiday, which marked the start of the U.S. summer driving season, when gasoline demand peaks.

''U.S. gasoline stocks are rising when demand is strong, and that means we do not have to worry too much about supplies,'' said Keiichi Sano, manager with the commodities business unit at Sumitomo Corp.

Crude oil stocks were expected to have dipped by 0.2 million barrels while distillate supplies were seen rising by 1.5 million barrels thanks to increased refinery production.

U.S. gasoline for June delivery was trading down 0.74 percent at SINGAPORE, May 31 (Reuters) Oil prices edged back below $72 on Wednesday, giving up some of the previous day's gains on forecasts for a further rise in U.S. gasoline stocks and OPEC's pledge to keep crude oil output flowing full throttle.

U.S. crude for July delivery shed 20 cents to $71.83 a barrel by 0356 GMT, a day after prices rose 66 cents to their highest close in two-and-a-half weeks, aided by data showing a leap in oil demand from number two consumer China.

Prices are tracking back toward April's record-high of $75.35 a barrel amid ongoing anxiety over Iran's stand-off with the West and a tentative recovery in other commodity markets.

Focus shifts later this week to supply data from the world's top consumer, with U.S. gasoline stockpiles expected to have risen by 1.4 million barrels last week, a fifth consecutive build, a preliminary Reuters poll showed.

The data will be released on Thursday, a day later than usual due to Monday's holiday, which marked the start of the U.S. summer driving season, when gasoline demand peaks.

''U.S. gasoline stocks are rising when demand is strong, and that means we do not have to worry too much about supplies,'' said Keiichi Sano, manager with the commodities business unit at Sumitomo Corp.

Crude oil stocks were expected to have dipped by 0.2 million barrels while distillate supplies were seen rising by 1.5 million barrels thanks to increased refinery production.

U.S. gasoline for June delivery was trading down 0.74 percent at $2.1340 a gallon on Wednesday.

OPEC ANXIOUS, BUT POWERLESS The Organization of the Petroleum Exporting Countries (OPEC) meets on Thursday in Caracas, but ministers have made clear they expect to leave supply quotas unchanged.

The cartel, which controls nearly a third of world production, fears that high oil prices may hurt long-term demand for oil by fuelling investment in alternative energy, but says it has been rendered powerless in the market by geopolitics.

''OPEC is becoming an audience,'' said Qatari Oil Minister Abdullah al-Attiyah.

Nigeria's oil exports have been cut by a quarter, or 455,000 barrels per day (bpd), since February because of a campaign of militant attacks in the Niger Delta, although the threat of further disruption eased on Tuesday after the white-collar oil union dropped a strike threat against Exxon Mobil Iran, OPEC's second-biggest supplier, has been a consistent concern this year as it resolutely pursues a nuclear programme that the West fears may allow it to build an atomic bomb.

Iranian officials said on Tuesday that the country wanted to resume negotiations with the EU and could even talk to Washington, but stressed Tehran would not stop running its centrifuges as the U.N. Security Council has called for.

On Thursday the five Council permanent powers and Germany will meet in Vienna, hoping to finalise a package of incentives for Iran to halt its nuclear programme along with penalties if it keeps defying international pressure.

REUTERS CS GC1124 .1340 a gallon on Wednesday.

OPEC ANXIOUS, BUT POWERLESS The Organization of the Petroleum Exporting Countries (OPEC) meets on Thursday in Caracas, but ministers have made clear they expect to leave supply quotas unchanged.

The cartel, which controls nearly a third of world production, fears that high oil prices may hurt long-term demand for oil by fuelling investment in alternative energy, but says it has been rendered powerless in the market by geopolitics.

''OPEC is becoming an audience,'' said Qatari Oil Minister Abdullah al-Attiyah.

Nigeria's oil exports have been cut by a quarter, or 455,000 barrels per day (bpd), since February because of a campaign of militant attacks in the Niger Delta, although the threat of further disruption eased on Tuesday after the white-collar oil union dropped a strike threat against Exxon Mobil Iran, OPEC's second-biggest supplier, has been a consistent concern this year as it resolutely pursues a nuclear programme that the West fears may allow it to build an atomic bomb.

Iranian officials said on Tuesday that the country wanted to resume negotiations with the EU and could even talk to Washington, but stressed Tehran would not stop running its centrifuges as the U.N. Security Council has called for.

On Thursday the five Council permanent powers and Germany will meet in Vienna, hoping to finalise a package of incentives for Iran to halt its nuclear programme along with penalties if it keeps defying international pressure.

REUTERS CS GC1124