SINGAPORE, March 8 (Reuters) - Oil prices were little changed on Thursday, biding time ahead of OPEC's policy-making meeting next week, which looks increasingly likely to agree further curbs on global crude supplies.
U.S. light sweet crude traded one cent firmer in electronic dealings in Asia at $29.01 a barrel, following a near 70-cents rally in New York a day earlier.
Crude prices have been propelled upwards by more than one dollar this week on seemingly growing momentum within the OPEC producers' cartel for a second round of production cuts.
Recent comments from the group's two largest producers, Saudi Arabia and Iran, and from smaller exporters Qatar and Indonesia have lent weight to speculation that group exports may be trimmed by up to one million barrels per day (bpd).
News that U.S. crude inventories have sunk to the lowest levels since the mid-1970s also sent jittery investors to buy into the market.
The American Petroleum Institute (API) reported a drop in U.S. crude tanks of 3.9 million barrels, while Energy Information Administration -- the statistical arm of the Department of Energy -- recorded a 2.7 million barrel decline.
U.S. crude stocks are now barely two percent above the 270 million barrel level that the National Petroleum Council says is needed for the U.S. oil system to work smoothly.
Low fuel inventory in the world's biggest energy consumer comes amid soaring consumption. The latest EIA data showed U.S. demand for crude and oil products averaging 20 million bpd in February, the highest for the month since 1979.
U.S. Energy Secretary Spencer Abraham signalled on Wednesday that the United States would opt for quiet diplomacy in talks with the OPEC cartel.
In contrast to his predecessor, Abraham told reporters in Mexico City that he did not want a public discussion over OPEC production.
"I think there are interests to have these conversations in a quieter fashion and make our own strategic decisions on that basis," said Abrahams.
Former energy secretary Bill Richardson used heavyweight diplomacy to lobby OPEC to raise crude production last year when prices soared to 10-year peaks.
The Organisation of Petroleum Exporting Countries, which is scheduled to review output policy in Vienna on March 16, applied output restraints throughout 1999 after oil sank below $10 a barrel a year earlier.
Those restrictions sent prices tripling last year to more than $35 and triggered calls from big consuming countries for increased supplies. OPEC raised output four times in 2000 by a total 3.7 million bpd.
Since then prices have come off about 25 percent and forecasts of a widespread economic slowdown have raised fears of depressed growth in petroleum demand.
OPEC trimmed supplies by 1.5 million bpd in February to avoid any oversupply in the second quarter, usually a period of seasonal downturn in demand.
The group has a target to keep a reference basket of seven crudes at about $25 a barrel, which would peg U.S. crude at about $29 a barrel. OPEC's reference basket stood at $24.36 a barrel on Tuesday.
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