Oil flat after four-day slide; gasoline build eyed

SINGAPORE, May 31 (Reuters) Oil prices were unchanged on Thursday after a four-day losing streak as traders took pause ahead of a likely further rise in U.S. gasoline inventories.

London Brent crude slipped 5 cents to $67.79 a barrel by 0330 GMT, taking losses so far this week to nearly $3 a barrel. U.S.

light, sweet crude was down 12 cents at $63.37 after bucking the trend to gain 34 cents on Wednesday.

ICE's Middle East Dubai crude was up 4 cents.

Losses in Brent crude and gasoline prices came as traders grew increasingly hopeful that motor fuel inventories would last out the peak-demand summer driving season.

Gasoline stocks are expected to have risen by 1.3 million barrels in the week preceding Monday's Memorial Day holiday, which marked the informal start of the summer, according to a Reuters poll ahead of data due out at 1530 GMT.

That would be the fourth build in a row, but would still leave stocks far shy of their norms for this time of year.

''It is worth noticing...that such a build would do little in alleviating the tight supply situation in the gasoline market,'' Barclays Capital said in a report.

Crude oil stocks are expected to have risen by 700,000 barrels and distillate inventories by the same margin.

Oil traders also kept a wary eye on Chinese equity markets after a 6.5 percent fall a day ago, although analysts have said the local equity market's volatility is unlikely to have an immediate impact on economic growth, or oil demand.

The Shanghai index fell sharply again in early trade on Thursday but was down just half a percent by 0317 GMT.

Nigeria will also remain a focus of concern for traders as violence against the oil industry continued into the first days of new president Umaru Yar'Adua's tenure, which began Tuesday.

Royal Dutch Shell said on Wednesday that its production had been cut by 150,000 barrels per day (bpd) after protesters sabotaged an export pipeline hub for the second time this month, although it had already begun restoring some output.

Adding to supply risks, June marks the start of the six-month period when Atlantic Ocean hurricanes can form, threatening Gulf of Mexico oil production and refining operation. The U.S. government's top climate agency expects up to 10 Atlantic basin hurricanes, of which three to five could be major ones.

Government and industry officials said on Wednesday that the U.S.

energy industry is better prepared after learning lessons from hurricanes Katrina and Rita in 2005.

REUTERS AGL PM1001