* North Korea news hits dollar, supports oil prices
* Expected rise in U.S. crude inventories weighs
* OPEC, U.S. shale producers gather in Houston for CERAWeek
* API data shows 5.7 mln barrel rise in U.S. crude stocks (Updates to API data, adds post-settlement trading)
By Stephanie Kelly
NEW YORK, March 6 (Reuters) - Oil prices rose on Tuesday,supported by a weaker dollar but U.S. crude's gains were limitedby expectations for a weekly rise in U.S. crude stockpiles.
Brent crude LCOc1 futures rose 25 cents to settle at$65.79 a barrel, a 0.4 percent gain. Brent reached a low of$65.30 a barrel and a six-day high of $66.16 a barrel during thesession.
West Texas Intermediate (WTI) crude CLc1 futures rose 3cents to settle at $62.60 a barrel. WTI notched its own six-dayhigh at $63.28 a barrel.
Oil prices fell in post-settlement trade after data from theAmerican Petroleum Institute showed U.S. crude inventories roseby 5.7 million barrels last week, a bigger-than-expected rise. drew support as the U.S. dollar fell to its lowest inmore than a week against a basket of currencies on news fromSouth Korea that North Korea was willing to hold talks with theUnited States on denuclearization, and would suspend nucleartests during any discussions.
South Korea also said it would hold a summit with NorthKorea for the first time in more than a decade. news led investors to sell the U.S. dollar and insteadbuy riskier assets such as commodities.
The dollar index last was down by half a percent. A weakergreenback makes dollar-denominated commodities cheaper forholders of other currencies.
"If you reduce geopolitical risk in the world, it might be abetter place to do business and that could be bullish," saidPhil Flynn, analyst at Price Futures Group in Chicago.
U.S. oil prices were under pressure from expectations thatweekly crude inventory data from the U.S. government, due onWednesday, would show a second straight rise. polled by Reuters ahead of the data on averageexpect U.S. crude stocks rose by 2.7 million barrels in the weekended March 2.
Inventories are rising during the seasonal maintenanceperiod for refineries, when shutdowns mean they need less crude.
A surge in U.S. crude production to more than 10 millionbarrels per day (bpd) has helped the country overtake topexporter Saudi Arabia.
Output hit a record 10.057 million bpd in November,according to the U.S. Department of Energy. U.S. Energy Information Administration said in a monthlyreport it expected fourth-quarter U.S. crude output to reach anaverage of 11.17 million bpd, up from its forecast a month agoof 11.04 million bpd. continued growth of U.S. shale has been a theme at theCERAWeek conference in Houston this week, said John Kilduff,partner at investment manager Again Capital in New York.
Brent had dipped closer to $65 in earlier trading, pressuredby the International Energy Agency's (IEA) warning on Mondaythat U.S. oil output was set to surge over the coming fiveyears. prospect of the Organization of the Petroleum ExportingCountries and non-member producers, including Russia,maintaining crude output cuts in the face of a boom in U.S.shale production helped lift Brent back above $65 a barrel thisweek.
April U.S. gasoline futures RBc1 rose as much as 0.50percent to hit $1.9443 a gallon, the highest since Jan. 30,before retreating.