Oil eases to $94

By Alex Lawler

LONDON (Reuters) - Oil eased to around $94 a barrel on Tuesday, pulled lower by concerns a recession in top oil consumer the United States would eat into fuel demand.

Supply disruptions in countries such as Nigeria and political tension in the Middle East limited the decline, while the slumping U.S. dollar supported oil and other commodities such as gold.

"There's a lack of real direction at the moment," said Kevin Blemkin, an oil broker at MF Global in London.

"The U.S. economy is weakening, so you'd expect to see the oil price soften. But all the headlines that come through seem to be bullish on the geopolitical side."

U.S. crude dropped 18 cents to $94.02 a barrel by 1210 GMT after rising $1.51 on Monday. London Brent eased 4 cents to $92.88.

Concern of a U.S. slowdown has prevented oil from repeating its all-time high of $100.09 hit on January 3. Former U.S. Federal Reserve Chairman Alan Greenspan said the U.S. economy was probably in recession or nearing it.

U.S. President George W. Bush said on Tuesday that an increase in OPEC's oil output would help ease the pain of high energy prices, raising the pressure on top exporter Saudi Arabia to act to tame prices.

Saudi Arabia is the de facto leader of the Organization of the Petroleum Exporting Countries. The producer group, which meets on February 1, has said repeatedly it is pumping enough oil to meet demand.

The U.S. president joins other leaders who this week have addressed the topic of record oil prices.

French President Nicolas Sarkozy told Saudi Arabia's King Abdullah that the kingdom should use its influence to moderate prices, which the French president said should realistically be around $70.

And Venezuelan President Hugo Chavez said on Monday he hopes oil will not go beyond $100. The OPEC member is normally a price hawk and typically resists OPEC agreements to increase output.

Oil's gain on Monday was prompted in part by the latest disruption to supply in Africa's top exporter Nigeria.

Royal Dutch Shell declared force majeure on crude oil shipments from its Forcados export terminal in Nigeria following sabotage to two pipelines last week.

Adding support on Tuesday, Turkish warplanes and artillery hit remote areas of northeastern Iraq used by Kurdish rebels, an Iraqi Kurdish official said.

The latest snapshot of U.S. crude oil inventories, due out on Wednesday, will help set direction for the market.

Stockpiles were expected to rise by 1.2 million barrels in the week to Friday, according to a Reuters survey. An increase would be the first in nine weeks.

(Additional reporting by Maryelle Demongeot in Singapore and Peg Mackey in London)

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