Oil drifts lower, awaits mixed US stock data

SINGAPORE, Nov 1 (Reuters) Oil prices drifted down toward a barrel on Wednesday, as OPEC's output curbs took effect with lingering questions over compliance and traders braced for a rise in U.S. crude supplies but a fall in product stocks.

U.S. light crude for December delivery fell 31 cents a barrel to .42 a barrel by 0701 GMT, nearly erasing Tuesday's 37-cent gain. Prices plunged nearly 4 percent on Monday and traded as low as on Tuesday amid easing tension in Nigeria and doubts over OPEC cuts.

London Brent crude was down 20 cents at .83.

Data due later on Wednesday is expected to show a sharp 2.7 million-barrel rise in U.S. crude oil inventories, recovering from a steep slump the previous week when bad weather forced the country's biggest import terminal to shut temporarily.

But gasoline and distillate stocks were expected to slide by 1.3 million barrels each, with a spell of chilly weather and heavy refinery maintenance eroding the robust pre-winter supply cushion, a Reuters survey of analysts found. S] ''Most participants expect a bearish number for crude oil, but I think that's already priced in. If we don't see a bearish number in products then the market may rise again above ,'' said Bansei Securities analyst Makoto Takeda.

He said readings of oil demand growth, which has been quickening, would also be important for the market's reaction.

OPEC CUTS TAKE EFFECT The Organization of the Petroleum Exporting Countries' (OPEC) first output curbs since 2004 come into effect on Wednesday, but many analysts and traders are unconvinced the full 1.2 million barrels per day (bpd) reduction will be met.

Saudi Arabia and the United Arab Emirates are alone among the cartel in telling refiners that supplies will be reduced, while second-smallest producer Indonesia has publicly broken ranks to say it should be exempt from its share due to falling output.

''It's unlikely that we'll see full implementation, but that's not important because the Saudis have committed to their reduction,'' said Takeda. ''There is a likelihood of a further cut in December, so traders are nervous about selling further.'' Oil traders say Nigeria, which was the first to instigate voluntary cuts, will actually increase exports in December, but officials said it was premature to judge results.

''It is too early to discuss the issue of compliance. We have to wait for at least a month to review production and see who is doing what,'' OPEC's acting Secretary-General Mohammed Barkindo said on the sidelines of an energy conference in Moscow.

Adding pressure to prices, Western oil companies in Nigeria on Tuesday began resuming production in the Rivers State after striking a deal with protestors.

REUTERS CS KP1319