Oil prices edge up ahead of U.S. inventories data

* U.S. crude stockpiles rise, fuel inventories fall - API
* Analysts expect U.S. crude stocks to rise by about 800,000
barrels - Reuters poll

By Florence Tan
SINGAPORE, March 10 (Reuters) - Oil ticked higher on
Wednesday, after falling for two straight sessions, with
investors looking ahead to U.S. inventories data due later in
the day for pointers on where prices will head next.
Brent crude LCOc1 for May rose 15 cents, or 0.2%, to
$67.67 a barrel by 0144 GMT, while U.S. West Texas Intermediate
crude CLc1 for April was at $64.24 a barrel, up 23 cents, or
0.4%.
Prices gained support last week from the OPEC+ decision to
largely maintain production cuts in April. They then initially
jumped on Monday, with Brent rising above $70 a barrel, after
attacks by Yemeni Houthis on Saudi's oil heartland. Investors took advantage of that rally to lock in profits,
ANZ analysts said in a note, adding that market sentiment was
slightly bearish on expectations that U.S. crude inventories
could rise for a third straight week.
Crude inventories rose by 12.8 million barrels in the week
to March 5, according to trading sources, citing data from
industry group the American Petroleum Institute. Analysts had
expected a build of about 800,000 barrels in a Reuters' poll.
Official figures from the Energy Information Administration
(EIA) are expected Wednesday at 10:30 a.m. ET.
Meanwhile, higher prices are expected to bring more U.S.
crude supplies back online.
U.S. crude production is still expected to fall by 160,000
barrels per day (bpd) in 2021 to 11.15 million bpd, the EIA said
on Tuesday, but that's a smaller decline than its previous
monthly forecast for a 290,000-bpd drop. The OPEC+ grouping - the Organization of the Petroleum
Exporting Countries (OPEC) and allied producers - may become the
victim of its own success, analysts at EFG bank said, as higher
prices resulting from supply restraint could incentivise U.S.
oil production.
"The current WTI oil price is well above the level needed to
incentivise a substantial increase in U.S. production, which
according to surveys by the Dallas Fed and the Kansas City Fed
stands at around $56 per barrel," EFG said.
"The longer it remains above this threshold, the greater the
incentive for U.S. and other non-OPEC+ producers to increase
production."