Oil eases, near $68

Oil slipped on Wednesday ahead of data expected to show rises in US crude and fuel inventories, but Brent prices held near $68 after a rally on further supply disruptions in the world's eighth largest exporter Nigeria.
London Brent crude, currently seen as more representative of the global oil market, was talked at $67.83/$67.95 a barrel for June, ahead of the contract's expiry on Wednesday, after gaining $1.28 on Tuesday to $68.11.
US crude futures dipped 12 cents to $63.05 a barrel. Royal Dutch Shell has cut output by 170,000 barrels per day since last on Thursday, after Nigerian villagers occupied a major oil pipeline hub, the firm said on Tuesday.
Militant attacks have now shut off nearly 900,000 bpd, or about 30 percent of Nigeria's supply capacity. "Brent is well sustained and trading higher than US crude due to production problems in Nigeria," said Tetsu Emory, chief strategist at Mitsui Bussan Futures.
"US crude is weighed by expected increases in inventories," he added. Analysts forecast in a Reuter's poll that government data due later on Wednesday will show US gasoline stocks up by 1.1 million barrels last week, increasing for the second week in a row as refiners recovered from maintenance shutdowns.
Crude inventories were expected to rise by 100,000 barrels, while distillate fuel stocks were seen up 1.4 million barrels. Falling US gasoline stocks in recent weeks ahead of the summer driving season have helped push average US pump prices to a record $3.10 a gallon. But gasoline prices might decline as refiners continue to ramp up output, and there are no plans to tap its strategic oil reserve, the US government said.
Support to the oil market still comes from concerns over Iran's atomic work. Tehran's chief nuclear negotiator Ali Larijani and European Union foreign policy Chief Javier Saloon will meet on May 31 for a new round of talks on Tehran's nuclear programme, the IRNA news agency said on Tuesday.
In neighbouring Iraq, where production has been hit by sabotage and neglect, Norwegian oil producer DNO will become the first foreign firm in more than three decades to start pumping Iraqi crude into the global market next month, the Financial Times reported on Wednesday.
However, major non-Opec producer Russia on Tuesday slashed its 2007 oil and gas output forecast by 9.4 percent due to project delays, taking total oil production to an estimated 2.6 million bpd for this year, down from 2.8 million in 2006.