Oil prices steady at $70, U.S. stockpiles seen up

SINGAPORE, June 27 (Reuters) Oil steadied near $70 a barrel on Wednesday, as U.S. crude inventories were forecast to balloon to a fresh nine-year high and gasoline stockpiles were seen rising as refiners boosted output.

London Brent crude currently seen as the best benchmark for global oil prices, edged up 1 cent to $70.18 a barrel by 0334 GMT, after falling $1.19 on Tuesday. U.S. light, sweet crude gained 3 cents to $67.80 a barrel.

U.S. crude inventories, already at the highest since May 22, 1998, are expected to have risen a further 1.2 million barrels last week, a Reuters poll of analysts found. Gasoline inventories are also expected to rise by 1.2 million barrels ''The main driver of the market now is the U.S. inventory data for both crude and gasoline. I believe gasoline demand and prices have peaked and are now starting to come off,'' said Tetsu Emori, chief commodities strategist at Japan's Mitsui Bussan Futures.

Gasoline supplies have risen since U.S. refineries returned from maintenance, with utilisation rates projected to rise by 1.0 percentage point to 88.6 percent of capacity.

However, analysts said the longer-term view remained bullish.

Venezuela confirmed on Tuesday that U.S. majors Exxon Mobil Corp. and ConocoPhillips would leave giant oil projects after they were nationalised, which U.S. Energy Secretary Sam Bodman worried could lead to lower U.S. imports from the Latin American country.

OPEC's president Mohammed al-Hamli reiterated the group's view that there is no need to raise production now, saying on Tuesday that the main factors keeping prices high are geopolitical tensions and U.S. refinery bottlenecks.

Supplies to the world's largest consumer are also expected to be hit by Mexico's declining Cantarell field, where output fell 0.8 percent in May to 1.579 million barrels per day (bpd).

Mexico is a top-three supplier to the U.S. and the world's fifth largest producer.

And in Brazil, oil workers in five states voted on Tuesday to strike as part of a five-day national strike threatened to start after July 5.

A strike would disrupt output at state firm Petrobras, which pumps about 1.8 million bpd.

REUTERS LPB RAI0934