Oil steady above $88 ahead of U.S. inventory data

By Randy Fabi

U.S. light crude for March delivery rose 24 cents to $88.65 a barrel by 7:05 a.m. EST, after tumbling nearly 2 percent the previous session.

A Reuters poll ahead of Wednesday's U.S. inventory report calls for a 2.6 million-barrel build in crude stocks, its fourth consecutive increase.

Oil was down more than a $1 earlier in the session as poor U.S. economic data reinforced fears that the world's largest economy is on the brink of a recession.

Fears the U.S. will slide into a full-blown recession in the wake of a housing slump and the resulting credit crunch have dampened the outlook for global energy demand growth, pulling oil back from a record-high above $100 a barrel hit in early January.

The Organization of the Petroleum Exporting Countries (OPEC) could keep output at current levels when its ministers meet next month if there is no change in the market, Secretary-General Abdullah al-Badri said on Tuesday.

(Additional reporting by Fayen Wong in Sydney; Editing by James Jukwey)