* Start of driving season, falling output lends some support
* U.S. crude stocks fall just as production also declines
* Nigerian oil pipeline attacks push up Brent
* OPEC meeting not expected to impact output
(updates prices)
By Henning Gloystein
SINGAPORE, May 30 (Reuters) - Oil prices dipped on Monday as
a strong dollar weighed on markets and Canadian oil sands
production was expected to increase this week.
Crude markets, however, did receive some support from the
start of the U.S. summer driving season coinciding with a fall
in U.S. crude output to its lowest since September 2014.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
trading at $49.22 per barrel at 0656 GMT, down 11 cents from
their last settlement.
International Brent futures were at $49.10 a barrel, down 22
cents.
The dollar hit a one-month high against the yen on Monday
and stood tall against other leading currencies .DXY after
comments by Federal Reserve Chair Janet Yellen increased the
likelihood of a near-term U.S. interest rate hike.
A strong greenback makes it more expensive for countries
using other currencies to import dollar-traded fuel, a potential
knock on demand.
An expected rise in Canadian oil sands production also
weighed on WTI, traders said. Oil producer Suncor Energy SU.TO
is planning to ramp up output at its fields in Alberta this week
after it was forced to shut them down earlier in May due to
massive wildfires.
Despite the expected rise in Canadian output, ANZ bank said
that WTI price support "still lingers" after a large fall in
U.S. oil inventories by 4.2 million barrels to 537 million
barrels due to strong demand. EIA/S
Traders said the official start to the U.S. peak demand
summer driving season, which kicks off with Memorial Day on
Monday, was the main reason for rising seasonal demand.
This also came just as U.S. oil production fell to 8.77
million barrels per day (bpd), the lowest level since September
2014, and down 8.77 percent since a June 2015 peak.
"The yoy (year-on-year) declines in production would be
470,000 bpd in 2016 and 305,000 bpd in 2017 if we account for
the impact of the estimated county-level well backlog being
gradually brought back online between June 2016 and December
2016," Goldman Sachs (NYSE:GS) said.
In global oil markets, Brent prices have been supported by a
series of supply disruptions in Nigeria, where militants have
been staging a wave of attacks on oil pipelines, cutting the
country's output to the lowest in more than two decades.
Attention will also be on a meeting by the Organization of
the Petroleum Exporting Countries (OPEC) in Vienna this week,
although most analysts do not expect any decisions that would
lead to changes in production.