After early year slump, crude oil returns to profit

Signs of strength in the US economy and data showing American explorers curtailed drilling activity is helping oil hold gains after its biggest jump in seven months.

While oil rebounded Friday from a three-week low as equities gained, crude has struggled to recoup losses from last month's broader market slump.

Reuters reports that U.S. West Texas Intermediate (WTI) crude futures were sold at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close.

OPEC should beware as USA shale producers are set to steal a bigger slice of the market in Asia, which consumes more oil than any other region, according to industry consultant Wood Mackenzie Ltd.

LONDON, March 13 (Reuters) - Oil rose on Tuesday, after Libya said loadings of crude at a key port had been suspended, offseting an earlier dent to the price caused by evidence of the inexorable growth in USA oil output.

Oil prices regained some ground on Monday afternoon but remained down as investors grappled with persisting concerns about rising U.S. output, while demand for U.S. Treasuries stayed strong despite increased supply.

"The ever-expanding USA supply continues to pose significant downside risk to oil prices", said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

Brent crude, the benchmark for more than half the world's oil, traded at $65.07 a barrel at 10:11 London on Monday, compared with about $45 in June.

Crude prices rose on Friday and earlier on Monday after the U.S. economy added the biggest number of jobs in more than one-and-a-half years in February. The global benchmark widened to a $3.89 premium to May WTI. Total output should now average 10.7 million barrels a day this year, up from a previous forecast of 10.6 million barrels a day.

The Energy Information Administration (EIA) said the United States may drastically reduce its import of crude oil from Nigeria by 2022, going by its projection of becoming a net energy exporter in four years.

U.S. tight oil production, or shale fracking, should rise by 131,000 barrels a day in April, to a record of 6.95 million barrels a day, according to the U.S. Energy Information Administration's latest drilling report released this week. Gasoline futures in NY are down 0.2% at $1.8895 a gallon.

Vanessa Coleman