Oil slips towards $58 on ample supply, stock build

LONDON (Reuters) - Brent crude oil steadied around $59 a barrel on Tuesday ahead of key industry data expected to show further builds in U.S. inventories due to heavy over-supply.

A Reuters survey forecast figures from the American Petroleum Institute on Tuesday, and the U.S. Department of Energy's Energy Information Administration, due to be published on Wednesday, would show U.S. crude stocks increased by 4 million barrels to a record high last week.

Brent futures for April were up 10 cents at $59.00 a barrel by 1100 GMT, while U.S. crude was down 15 cents at $49.30.

"The fundamental backdrop is still bearish," said Carsten Fritsch, senior oil and commodities analyst at Commerzbank in Frankfurt, adding that there was a "huge over-supply in the market".

"We expect another strong increase in U.S. crude inventories to be reported," he said.

Huge increases in domestic oil production have left the U.S. oil market with a fuel glut, one exacerbated by a refinery strike, that has squeezed demand for crude oil.

The United States is in its fourth week of its largest refinery strike for 35 years, affecting 12 refineries accounting for a fifth of national production capacity. Talks to end the strike are not expected to resume this week.

"Spreads for crude oil are becoming severely altered by the refinery strikes," analysts at Singapore brokerage Phillip Futures said in a note to clients, saying that the strike had reduced demand for U.S. crude and helped widen its discount below Brent, the North Sea benchmark.

The spread between Brent and U.S. crude stood at $9.69 a barrel at 1100 GMT, after hitting $10.27 on Monday, its widest since March 2014.

A report in the Financial Times on Monday quoted Nigeria's oil minister as saying the country would call an OPEC extraordinary meeting if prices dropped further, offering some support to oil prices.

But a delegate to the Organization of the Petroleum Exporting Countries told Reuters on Tuesday that the producer group had no plans to meet before June.

Analysts said an emergency OPEC meeting was not expected.

"By making statements with no back-up, countries like Nigeria and Venezuela are hurting oil prices (and their budgets) as they just continue to show that they have no power within OPEC," said independent Swiss energy consultant Olivier Jakob, the managing director of Petromatrix GmbH.

(Additional reporting by Jane Xie in Singapore; Editing by Christopher Johnson and Keith Weir)

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