By Ahmed Aboulenein
LONDON (Reuters) - Brent oil gained slightly, heading towards $78 a barrel on Wednesday on speculation OPEC may act to stabilise prices that have fallen by almost a third in five months when it meets next week.
However gains were trimmed after weekly U.S. government data showed a rise in crude inventories there.
Brent was up 27 cents at $78.74 a barrel at 1552 GMT, after settling 84 cents lower in the previous session.
U.S. crude was up 1 cent at $74.61 a barrel. The U.S. crude futures contract closed $1.03 lower on Tuesday.
Data from the Energy Information Administration showed U.S. crude stocks rose last week even as refineries hiked output, while gasoline stocks increased and distillate inventories fell.
"The builds in crude oil and gasoline stocks are negatives for prices and the focus is really now going to be on the OPEC meeting and whether or not they cut production," analyst at Tradition Energy in Stamford, Connecticut, said.
"The perception is there is more than ample supply and the global economic slowing is not going to help demand improve and no one so far seems to be stepping in to lower production," Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut said.
Growing supply and a steep fall in prices has prompted some smaller OPEC members to call for production cuts at the Nov. 27 meeting but Saudi Arabia has so far shown no indication that it will support such a move.
Libya's OPEC governor, Samir Kamal, told Reuters he thought OPEC would agree as a minimum step to remove from the market oil that it is pumping above the agreed target.
"I believe that the ministers will arrive to an agreement," Kamal said via email on Wednesday.
Morgan Stanley oil analysts led by Adam Longson said in a research note they now thought OPEC was likely to cut production sooner or later.
But even seasoned OPEC veterans say they do not know how the cartel will respond to the collapse in oil prices this year.
"For the first time, I really do not know what is likely to happen at the meeting. It is not clear," one long-serving senior OPEC delegate told Reuters.
Oil prices fell on Tuesday after data from the American Petroleum Institute (API) showed U.S. crude stockpiles rose 3.7 million barrels in the week ending Nov. 14, including a 1.4-million-barrel build at the Cushing oil hub.
A closely watched report from the U.S. Department of Energy's Energy Information Administration (EIA) was due at 1530 GMT on Wednesday. A Reuters poll of seven analysts forecast crude stocks fell 800,000 barrels last week.
Unseasonably cold weather in the United States could boost demand for heating oil, with temperatures in all 50 states dipping to freezing or below on Tuesday.
(Additional reporting by Jacob Gronholt-Pedersen in Singapore and Robert Gibbons New York, writing by Simon Falush and Christopher Johnson; editing by Jason Neely and William Hardy)
