Oil falls as IEA warns stocks may hit all-time high

LONDON (Reuters) - Brent crude fell below $58 a barrel on Tuesday after the International Energy Agency (IEA) warned that oil prices may decline as stocks continue to increase this year.

Oil stocks held by countries in the Organisation for Economic Cooperation and Development may come close to the all-time high of 2.83 billion barrels in the middle of 2015, said the IEA, which advises the West on energy policy.

"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," the IEA said in a monthly report.

Brent crude slipped 66 cents to $57.68 by 0926 GMT (04:26 a.m. EST), ending a three-day rally. The benchmark gained more than 9 percent last week, its biggest weekly rise since February 2011.

U.S. crude futures dropped to $52.06, down 80 cents.

China's consumer inflation came in at a five-year low for January, raising worries about oil demand in the world's second-largest economy.

"Economic activity is slowing, especially in heavy industry and that inevitably weighs on commodities," Michal Meidan, director of independent consultancy China Matters, said in the Reuters Global Oil Forum.

Oil prices received a boost on Monday after a monthly report by the Organization of the Petroleum Exporting Countries (OPEC) raised the forecast for 2015 demand for its oil to 29.2 million barrels per day (bpd), up 430,000 bpd from an earlier forecast.

The IEA's medium-term report released on Tuesday predicted demand for OPEC oil would hold at 29.4 million bpd this year, and said U.S. shale oil output growth would pause before regaining momentum.

U.S. crude snapped three days of gains after a preliminary survey showed that U.S. commercial crude stockpiles likely hit a record high last week.

"Another report of strong builds in inventories in this week's EIA market report could halt oil's rally," ANZ bank said, referring to the U.S. Energy Information Administration's stockpile data due on Wednesday.

Elsewhere, a strike by security guards that closed Libya's eastern oil port of Hariga, the country's last functioning export port apart from two offshore fields, ended late on Monday.

(Additional reporting by Adam Rose in Beijing; Editing by Dale Hudson)

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