LONDON (Reuters) - Brent crude oil fell towards $55 a barrel in choppy trading on Tuesday after the dollar firmed, adding pressure to a market grappling with signs of slowing Chinese growth and Saudi Arabian oil production close to an all-time high.
The dollar reversed early losses to rise 0.25 percent against the euro
, pressuring dollar-priced commodities that tend to move inversely to the U.S. currency. Brent futures for May delivery were down 49 cents at $55.43 by 1414 GMT, off an earlier high of $56.79, while U.S. crude rose 3 cents to $47.48 a barrel.Its discount to Brent narrowed to around $8 a barrel for the first time in a week.Oil prices were also under pressure from data showing factory activity in China slipped in March, adding to concerns about growth in the world's second largest economy and top oil importer. U.S. factory activity increased slightly. The Chinese data followed comments from OPEC kingpin Saudi Arabia that it is pumping around 10 million barrels of crude per day, close to an all-time high and some 350,000 barrels per day above the figure it gave OPEC for its February output. OPEC's decision to fight for market share rather than cutting output has contributed to a halving in oil prices since June as the global surplus of oil supplies has grown."The Saudi Arabian oil minister had only just emphasised at the weekend that his country is not willing to bear the burden of production cuts on its own," Commerzbank analyst Carsten Fritsch said.The market is expected to be at its weakest in the second quarter as winter fuel demand wanes while peak summer driving activity is yet to kick in. Energy consultancy FGE forecasts a global surplus of 2 million barrels per day between April and June."We expect crude prices to be pressured once again," FGE said in a note.U.S. crude stocks, which already stand at their highest in at least 80 years, were forecast to have risen for an 11th record-breaking week, a preliminary Reuters survey showed. The poll of six analysts, taken ahead of weekly inventory reports from industry group the American Petroleum Institute (API) and the U.S. government's Energy Information Administration, showed a crude stock build of 5 million barrels on average last week. [EIA/S]In the week to March 13, U.S. crude stocks rose nearly three times as much as expected. (Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson, Pravin Char and David Evans)
