Oil slips on strong dollar as key OPEC meeting looms

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UPDATE 8-Oil slips on strong dollar as key OPEC meeting looms

* Euro tumbles as ECB stands pat on rates into 2019

* OPEC, Russia may agree next week to raise output

* OPEC split with some producers opposing increase

* U.S. crude production hits record high of 10.9 mln bpd (New throughout; updates prices, market activity and comments;new byline, changes dateline, previous LONDON)

By Ayenat Mersie

NEW YORK, June 14 (Reuters) - Oil prices slipped onThursday, pressured by a strengthening dollar, rising U.S. crudeproduction, and expectations that the Organization of thePetroleum Exporting Countries could decide to increase output attheir meeting next week.

Brent crude oil LCOc1 lost 82 cents to trade at $75.92 abarrel by 11:32 a.m. (1532 GMT), while West Texas Intermediatecrude CLc1 slipped 24 cents to $66.40.

Brent and WTI hit 3-1/2-year highs in May but have sincedrifted lower, indicating investors expect the market to soonbecome better supplied as U.S. crude production rises and asOPEC and its allies look poised to increase output.

The dollar .DXY gained against a basket of currencies,making moves towards the six-month highs it hit in late May asthe euro fell broadly as the European Central Bank planned tokeep interest rates at record lows into the summer of 2019. urn:newsml:reuters.com:*:nL8N1TG45R

"(ECB President Mario) Draghi came out a little bit moredoveish than people though the was going to be. And that reallycaused the euro to take a dip and the (U.S.) dollar to go up,which is putting downward pressure on prices," said Phil Flynn,analyst at Price Futures Group in Chicago.

A stronger dollar makes greenback-denominated commodities,like oil, more expensive for holders of other currencies.

Oil supply concerns have also been weighing on the market.

U.S. crude output has risen almost 30 percent in the lasttwo years to a record high of 10.9 million barrels per day.Russia pumped 11.1 million bpd in the first two weeks of June,above Saudi Arabia, which produced slightly more than 10 millionbpd.

In 2017, OPEC began supply cuts of 1.8 million bpd tosupport the market. But, with Brent prices up by around 180percent from their 2016 low, global crude inventories falling,Venezuelan production plummeting and imminent sanctions againstIran, the group may soon end their supply cuts.

The alliance meets on June 22-23 in Vienna, where it isexpected to come to a decision on output.

"A wait-and-see approach is taking hold across the energycomplex as market participants buckle down ahead of next week'scrunch OPEC/non-OPEC meeting," said Stephen Brennock, analyst atLondon brokerage PVM Oil Associates.

Russian Energy Minister Alexander Novak told reporters thatmembers of the OPEC-plus production cut deal can considerreturning up to 1.5 million bpd to the market gradually. urn:newsml:reuters.com:*:nR4N1NL07B

Saudi Energy Minister Khalid al-Falih said he expected areasonable and moderate agreement next week when OPEC andnon-OPEC oil producers meet. urn:newsml:reuters.com:*:nL8N1TG2IX

Barclays said in a note that it expected the group toincrease production by 700,000 to 800,000 bpd. urn:newsml:reuters.com:*:nL4N1TG2XA

GRAPHIC: U.S. oil production   https://reut.rs/2JJiOzg
(Additional reporting by Christopher Johnson and Amanda Cooperin London and Henning Gloystein in Singapore;Editing by Marguerita Choy and Edmund Blair) ((ayenat.mersie@thomsonreuters.com; +1 646 223 4165;))

This article appears in: Stocks , World Markets , Politics

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