Oil steady above $61

Oil steadied over $61 on Tuesday, supported by the potential for an Opec supply cut this week after mild weather and high inventories in the United States had pushed prices down. United States crude prices traded steady at $61.22 a barrel after losing 81 cents on Monday.
London Brent crude slipped 4 cents to $61.80 a barrel. "Traders are selling as the weather in the United States seems set to stay well warmer than normal," said Tobin Gorey of the Commonwealth Bank of Australia.
"The same facts are driving Opec to consider further cuts to output." United States heating demand are expected to be nearly 27 percent below normal this week, with warmer temperatures in most regions east of the Rockiest, the National Weather Service said on Monday.
A narrow majority within Opec wants to cut the group's output further at Thursday's meeting, a top Opec official told Reuters. However, Saudi-owned newspaper Al Hyatt quoted Opec sources as saying the group would keep supply unchanged.
Opec, which pumps more than a third of the world's oil, has implemented about 730,000 barrels per day (bpd) of a promised 1.2 million bpd cutback from November, according to a Reuters survey.
"Despite the market's scepticism on the effectiveness of Opec action, the primary danger remains that short-term price weakness and a perception of oversupply could lead Opec to overtighten the market," said Barclays Capital.
United States crude oil inventories are at the highest level for this time of year since 1993, though analysts in a Reuter's poll expected crude stocks to have fallen by 700,000 barrels last week.
The government data is due on Wednesday. Apart from high inventories, analysts point to the weakening dollar, which reduces Opec's revenue from dollar-denominated oil, as another reason that could push Opec to take further action to stem a 22 percent price slide since a record over $78 in July.
The dollar fell against the euro on Tuesday, extending losses made after former Federal Reserve Chairman Alan Greenspan warned investors to expect a few more years of dollar weakness.
"The weaker dollar will also encourage the cartel's hawks to push for additional cuts this week in Nigeria," said J.P. Morgan. Opec linchpin Saudi Arabia has already told oil refiners in Asia that it will reduce their supplies next month to 8 percent below contracted volumes. About half of the kingdom's 7 million bpd of crude exports move to Asia.