Oil near $ 61 as US fuel stocks seen down

SINGAPORE, March 7 (Reuters) Oil stood near a barrel on Wednesday, as investor sentiment improved with a recovery in equity markets and oil dealers forecast a drop in gasoline inventories in top consumer the United States.

U.S. crude traded up 6 cents to .75 a barrel by 0637 GMT, after gaining 62 cents on Tuesday. London Brent crude was up 7 cents at .46.

''Oil prices moved higher... with the gains on international equity markets helping to bolster confidence in the prospects for oil demand,'' said David Moore, commodity strategist at the Commonwealth Bank of Australia.

A cautious share price recovery stalled in Tokyo on Wednesday, as investors fretted about U.S. economic health in the wake of a week-long downturn, after a global stock rebound on Tuesday raised hopes a flight from risk may have run its course.

World oil demand over the next six months will grow at a much slower pace than previously predicted, but U.S. petroleum use will remain strong, the U.S. government's top energy forecasting agency said on Tuesday Oil dealers are now looking for a signal on demand strength from U.S. inventory data due later on Wednesday, forecast in a Reuters poll of analysts to show a 1.4 million-barrel decline in U.S. gasoline stocks ahead of peak summer driving demand.

Analysts expected a 2 million-barrel rise in crude stocks as refinery problems cut runs, while a late cold snap in the United States was seen pushing U.S. distillates stocks, including heating oil, down by 2.5 million barrels Temperatures in the U.S. Northeast were seen 18-25 degrees Fahrenheit below normal on Tuesday and more cold is seen on Wednesday, forecaster DTN Meteorlogix said.

''The flow of fundamental data has remained strong,'' Barclays Capital said.

Oil was also supported after Royal Dutch Shell said on Tuesday it reduced oil production in Nigeria by 187,000 barrels per day (bpd) after a spill from a major pipeline in the Niger delta.

Traders are also keeping a wary eye on OPEC member Iran's standoff with the West over its nuclear programme.

Major powers working on a U.N. resolution to impose new sanctions on Iran probably will not complete a draft text by the end of the week as expected, diplomats said after another round of talks on Tuesday.

REUTERS PV DS1216