(Corrects the change on Brent crude in paragraph two)
* Weakening dollar, falling U.S. output lift market
* Venezuela output to fall, state may face default -analysts
* UAE oil field outages to end this month -Deutsche Bank
* Saudi output could hit 10.5 million bpd this summer
* Dozens of tankers carry unsold oil on seas
By Henning Gloystein
SINGAPORE, April 29 (Reuters) - Oil prices edged to new 2016
highs on Friday, lifted by a weak dollar and falling production
in the United States, although a looming rise in Middle East
output capped gains.
Brent crude futures LCOc1 were trading at $48.30 a barrel
at 0644 GMT, up 16 cents from their last close. U.S. crude
CLc1 was up 24 cents at $46.27 a barrel, with both contracts
hitting fresh 2016 highs.
"The market is coming into better balance and we maintain
the view that the current oversupply will flip into undersupply
in 2H," investment bank Jefferies said on Friday.
"Global spare capacity is now 2 million barrels per
day(bpd), or about 2 percent of global demand. This is a
precariously low level," it added.
Brent and WTI have risen by almost a third from April
troughs and are up over 75 percent above their 2016 lows, lifted
by falling output and a weakening dollar, which has dropped more
than 6 percent against a basket of other leading currencies
.DXY this year.
But Deutsche Bank (DE:DBKGn) said a looming rise in production by
members of the Organization of the Petroleum Exporting Countries
(OPEC) - due to climbing Iranian output and following outages in
Iraq, Nigeria and the United Arab Emirates - could cap recent
oil price rises.
"A sustainable rise in OPEC production may be just around
the corner, and ... the rally may pause," the bank said.
"Maintenance in the UAE ... is scheduled to end in April,
implying a rise from current production of 2.73 million bpd to
the previous 2.91 million bpd production rate in May," Deutsche
said.
Additionally, Saudi output is expected to edge up by 350,000
barrels to around 10.5 million bpd, sources told Reuters, just
as dozens of tankers filled with unsold oil are currently at sea
seeking a buyer.
One of the main repercussions of the global oil price rout
between 2014 and early 2016 has been a deep economic crisis in
crude export-reliant Venezuela, where political risk consultancy
Eurasia Group said the government faces default as the state
runs out of cash to keep its oil pumps running.
"The government needs to invest about $15 billion per year
to maintain current production (2.4 million bpd), and mounting
problems will probably lead to a decline of 100,000-150,000 bpd
this year," Eurasia Group said.
"Barring a meaningful recovery in oil prices or fresh loans
from China in the second half of the year, scarce foreign
exchange will probably force the state to default later this
year, most likely in the fourth quarter," it added.
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GRAPHIC on oil price rally http://tmsnrt.rs/1pMzafo
GRAPHIC on dollar weakness http://tmsnrt.rs/1NEnmXX
GRAPHIC on U.S. crude oil production http://tmsnrt.rs/244AKvS
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(Editing by Richard Pullin and David Goodman)