Oil falls near $58, awaits US inventory data

London, Oct 4 (Reuters) Oil deepened its three-month slide, closing in on a barrel, due to expectations of a rise in brimming U.S. fuel stockpiles and in the absence of more supply cuts by OPEC members.

Oil's 25 percent drop from its mid-July peak of .40 prompted OPEC President Edmund Daukoru on Tuesday to call on other OPEC members to follow the lead set by Nigeria and Venezuela in cutting exports.

''What's frightened OPEC is the speed of the price decline -- and it's easy to rationalise because stocks are high. There is definite cause for concern,'' said energy consultant Geoff Pyne.

''But oil at is still high in absolute terms, so it's a difficult political decision for some producers to cut supply -- especially Saudi Arabia.'' U.S. crude fell 38 cents to .30 by 0900 GMT, taking the market to the weakest level since mid-February after a London, Oct 4 (Reuters) Oil deepened its three-month slide, closing in on $58 a barrel, due to expectations of a rise in brimming U.S. fuel stockpiles and in the absence of more supply cuts by OPEC members.

Oil's 25 percent drop from its mid-July peak of $78.40 prompted OPEC President Edmund Daukoru on Tuesday to call on other OPEC members to follow the lead set by Nigeria and Venezuela in cutting exports.

''What's frightened OPEC is the speed of the price decline -- and it's easy to rationalise because stocks are high. There is definite cause for concern,'' said energy consultant Geoff Pyne.

''But oil at $60 is still high in absolute terms, so it's a difficult political decision for some producers to cut supply -- especially Saudi Arabia.'' U.S. crude fell 38 cents to $58.30 by 0900 GMT, taking the market to the weakest level since mid-February after a $2.40 fall the previous session. London Brent shed 35 cents to $58.08, after hitting this year's low of $57.78 earlier in the session.

U.S. data, set for release at 1430 GMT, are expected to show a 1.5 million barrel build in distillate stocks, according to a Reuters poll of analysts. If the forecast holds, distillates will have risen for the past two months.

Gasoline supplies are seen up 700,000 barrels, while crude stockpiles are expected to fall 500,000 barrels.

Japan, the world's third largest energy consumer, also has healthy heating oil stocks, which are at the highest level since last November.

''Inventories are huge -- sentiment is completely bearish,'' said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. ''People were looking at $100 but that was wrong, so people are liquidating long positions.'' Venezuelan President Hugo Chavez said the price of oil should not fall below $60 a barrel, while the country's energy minister said markets were oversupplied by 500,000 barrels.

But there is no evidence of other OPEC members joining Nigerian and Venezuelan moves to trim output.

HURRICANE THREAT FADES The fading threat of strong hurricanes -- such as Katrina and Rita, which pounded crude and refinery production in the U.S. Gulf Coast region last year -- added to the bearish tone.

Noted hurricane forecaster William Gray at Colorado State University said on Tuesday the milder-than-expected Atlantic season will produce just two more tropical storms and no more ''major'' hurricanes due to El Nino conditions in the Pacific.

But given a risk of further supply disruptions and higher winter demand, some analysts expect a rebound.

''I would think anything below $60 is a buying opportunity so on a technical perspective, prices would see a rebound soon,'' said Gerard Burg, a commodities analyst at the National Australia Bank.

REUTERS KR DS1502 .40 fall the previous session. London Brent shed 35 cents to .08, after hitting this year's low of .78 earlier in the session.

U.S. data, set for release at 1430 GMT, are expected to show a 1.5 million barrel build in distillate stocks, according to a Reuters poll of analysts. If the forecast holds, distillates will have risen for the past two months.

Gasoline supplies are seen up 700,000 barrels, while crude stockpiles are expected to fall 500,000 barrels.

Japan, the world's third largest energy consumer, also has healthy heating oil stocks, which are at the highest level since last November.

''Inventories are huge -- sentiment is completely bearish,'' said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. ''People were looking at 0 but that was wrong, so people are liquidating long positions.'' Venezuelan President Hugo Chavez said the price of oil should not fall below a barrel, while the country's energy minister said markets were oversupplied by 500,000 barrels.

But there is no evidence of other OPEC members joining Nigerian and Venezuelan moves to trim output.

HURRICANE THREAT FADES The fading threat of strong hurricanes -- such as Katrina and Rita, which pounded crude and refinery production in the U.S. Gulf Coast region last year -- added to the bearish tone.

Noted hurricane forecaster William Gray at Colorado State University said on Tuesday the milder-than-expected Atlantic season will produce just two more tropical storms and no more ''major'' hurricanes due to El Nino conditions in the Pacific.

But given a risk of further supply disruptions and higher winter demand, some analysts expect a rebound.

''I would think anything below is a buying opportunity so on a technical perspective, prices would see a rebound soon,'' said Gerard Burg, a commodities analyst at the National Australia Bank.

REUTERS KR DS1502