* Brent tops $114.94, U.S. crude hits $95.75 a barrel

  * IEA forecasts tighter oil market to 2012

  * Coming up: U.S. weekly jobless data

 

  (Recasts, adds fresh quotes, prices, previous SINGAPORE)

  By Claire Milhench

  LONDON, June 16 (Reuters) - Oil rebounded on Thursday, with Brent pushing towards $115 after its second-largest drop in two years on Wednesday created buying opportunities and the IEA forecast higher demand and reduced OPEC spare capacity.

  But traders and analysts said the overall trend remained downwards, given a stream of negative economic data coming out of the United States, the Greek sovereign debt crisis and rising risk aversion amongst investors, who returned to the safe haven of the U.S. dollar.

  " I wouldn't read too much into today's price increase, the overall sentiment is still negative," said Carsten Fritsch, an analyst at Commerzbank in Frankfurt.

  Brent crude for August, the front-month contract after July expired on Wednesday, was up $1.80 to $114.81 a barrel by 0843 GMT as bargain hunters nipped in.

  U.S. crude was up 83 cents to $95.62 a barrel at the same time, following larger-than-expected stock draws week-on-week, according to Energy Information Administration data.

  The International Energy Agency (IEA) called on oil-producing group OPEC to raise output, saying that seasonal demand from refiners was set to soar in the third quarter.. It saw a tighter oil market to 2012 than previously expected, but traders were unimpressed.

  " I am not sure the IEA report will be enough to create a sustained move to the upside," said Tony Machacek, a trader at Bache Commodities. " I would expect further downside after yesterday's action."

  He pointed out that stock markets had also taken a hammering on Wednesday, and the dollar had strengthened as the euro came under sustained pressure.

  " We're reacting to the substantial sell-off last night -- U.S. products got absolutely battered," he said, adding that U.S. crude was challenging two-month lows.

  The dollar was up 0.07 percent against a basket of currencies at 0838 GMT, whilst the euro slumped to a three-week low.

  Fritsch also pointed to the dollar, weaker stock markets and higher risk aversion. " I think we can expect oil prices to resume their downward trend."

  Fritsch said yesterday's weak U.S. data and the ongoing problems in the eurozone were weighing on markets.

  " We have seen an escalation of the crisis in Greece with violent protests, a government reshuffle, and the ratings agencies are still rating the risk of restructuring or default. This helps keep risk aversion elevated."

  Greek Prime Minister George Papandreou said he would form a new cabinet and seek a vote of confidence from his fractious Socialist party to push through a harsh austerity bill, as riot police battled tens of thousands of protesters in the heart of Athens.

  Greece must pass a new round of tax rises and spending cuts to receive a new EU/IMF bailout and a 12 billion euro ($17 billion) aid tranche.

  Edward Meir, senior commodity analyst at MF Global, agreed the trend was downwards: " Until such time as the markets get a clear indication as to which way the authorities are leaning, we expect to see further euro weakness, dollar strength, and consequent downward pressure on commodities," he said in a note.

 

  PULL-BACK

  The commodities markets pulled back sharply on Wednesday, with U.S. crude down more than 4 percent to $94.81, the lowest settlement since Feb. 22. Brent crude gave up nearly 6 percent in its second-largest single-day drop since April 2009.

  Ben Westmore, a commodities analyst at National Australia Bank, said there was a little bit of buying on weakness after the fall overnight.

  Meir said that from a technical standpoint, U.S. crude was at a significant trading range support at around $95. " But given the momentum behind Wednesday's decline, we suspect this level will eventually give way. Brent is in far better technical shape." (Additional reporting by Alejandro Barbajosa in Singapore, editing by Jane Baird)

* OPEC expected to lift formal output limits

  * Dollar under pressure after Bernanke remarks, supports oil

  * Coming Up: Vienna OPEC meeting, EIA inventory data (Updates prices)

  By Randy Fabi

  SINGAPORE, June 8 (Reuters) - Brent oil dropped below $116 a barrel on Wednesday, ahead of an OPEC meeting where members are expected to agree to raise global supplies to rein in high prices that have weighed on growth and stoked inflation in the United States, Europe and Asia.

  Dollar weakness limited the fall after U.S. Federal Reserve Chairman Ben Bernanke said growth in the world's largest economy had slowed. [ID:nN07142566]

  Brent crude < LCOc1> dropped 49 cents to $116.29 a barrel by 0647 GMT, erasing some of the gains from the previous session. U.S. crude < CLc1> eased 45 cents to $98.64 a barrel.

  Regardless of OPEC's decision, top oil exporter Saudi Arabia plans to pump another 500,000 barrels a day (bpd) this month to reach at least 9.5 million bpd, its highest output for three years, a senior Gulf industry official familiar with Saudi oil policy told Reuters. [ID:nLDE7560QM]

  The kingdom, the biggest producer in OPEC, wants the organization to lift formal output limits for the first time since 2007 to show consumer countries that it recognises the danger to the economy from energy inflation.

  Saudi and its Gulf Arab allies want OPEC to at least close the 1.4 million bpd gap between the producer group's two-and-a-half year old official production target of 24.8 million bpd and actual output, estimated by OPEC in April at 26.2 million bpd.

  " We think that the likely OPEC announcement of a 1.5 million bpd increase in production quotas will offer moderate pressure to trade initially but also think that it has already been priced in," said Tom Pawlicki, analyst at MF Global Research.

  Riyadh hopes its extra supplies will put an end to oil's sharp rally, driven by strong demand growth and Arab unrest.

 

  The dollar edged up from a one-month low against a basket of major currencies, but was under pressure on Bernanke's comments and after a senior Chinese currency regulator warned of the risk of excessive dollar holdings.

  " These (oil) prices are being driven by the U.S. dollar," said Jonathan Barratt, managing director of Commodity Broking Services. " The weak dollar-long commodity trade is entrenched regardless of what the fundamentals are."

  A technical analysis by Reuters analyst Wang Tao showed Brent oil prices facing resistance at $118 per barrel and that signals would be neutral so long as oil stays above $113.60 per barrel. U.S. oil was biased to fall to $97.50

  The U.S. government raised its world oil demand forecast for 2011 on expectations Japan and other countries will need more crude to generate electricity, a surprise move that adds pressure on OPEC to boost production. [ID:nN07139085]

  But there are still worries about mounting debt in the world's largest economy and an idea once confined to the fringes is seeping into its mainstream -- that a brief U.S. default might be an acceptable price to pay if it forces the White House to deal with runaway spending. [ID:nN07154296]

  Weak economic data and sluggish oil demand from the U.S., the world's largest consumer of oil, have kept a lid on prices.

  U.S. crude stocks slipped 5.5 million barrels in the week ended June 3, data from the American Petroleum Institute showed on Tuesday, far exceeding the average analyst forecast for a drop of 300,000 barrels.

  The U.S. Energy Information Administration will issue its weekly inventory data later on Wednesday.

  Analysts expected U.S. crude oil inventories to have fallen 300,000 barrels last week, while gasoline stocks climbed 1 million barrels, according to a Reuters poll. (Additional reporting Rebekah Kebede in PERTH Editing by Ed Lane)