UPDATE 3-Oil below $118 ahead of U.S. supply data

                                
 (Adds analyst comment, updates prices)
                                
 By Jane Merriman
                                
 LONDON, April 23 (Reuters) - Oil eased on Wednesday from a
record high of nearly $120 a barrel in the previous session, as
traders anticipated a rise in crude oil stocks in the world's
top energy consumer the United States.
                                
 U.S. crude <CLc1> for June was down 69 cents at $117.38 a
barrel at 1255 GMT. The May contract expired on Tuesday at
$119.37, after briefly hitting an all-time peak of $119.90.
                                
 London Brent crude <LCOc1> was down 68 cents at $115.27,
after touching a record high of $116.75 the previous session.
                                
 Latest weekly fuel inventory data from the U.S. Energy
Information Administration due later on Wednesday is forecast to
show a 1.2 million barrel rise in crude stocks last week, while
gasoline stocks are expected to have fallen by 2.3 million
barrels. [EIA/S].
                                
 "We doubt this week's figures will do much to dent the
recent advance," Edward Meir of broker MF Global said in a
research note.
                                
 Oil has surged above $100 this year in response to booming
demand from emerging markets such as China plus underinvestment
in new oil supplies that have contributed to a fivefold increase
in prices since 2002.
                                
 Hedge funds and other investors have poured money into oil,
gold and other commodities because of turmoil in equity and bond
markets related to the credit crisis.
                                
 "A lot of the movement up to $120 can be explained with
financial demand. We don't feel $120 is justifiable in terms of
underlying fundamentals," said Michael Waldron oil analyst at
Lehman Brothers.
                                
 
                                
 DEMAND STILL HIGH
                                
 The threat of a U.S. recession not put the brakes on oil's
advance and high prices have yet to have a major impact on
demand.
                                
 "We are seeing no evidence of demand destruction even as
prices keep rising," said Jim Ritterbusch, president of
Ritterbusch and Associates in Galena, Illinois.
                                
 "OPEC is still not willing to pump more oil onto the market,
and to add to the situation, there is no significant production
increase beyond OPEC," he added.
                                
 President George W. Bush on Tuesday said he was concerned
about record high crude oil and gasoline prices. [ID:nN22361581]
                                
 But a meeting of major energy producers and consumers in
Rome this week highlighted the fact that the world might have to
live with high oil prices to ensure supplies for the future.
[nL22840262]
                                
 Long-dated oil prices are above $100 a barrel out to 2016,
illustrating the long-term supply constraints.
                                
 Disruptions in Nigeria have intensified the market's bullish
tone.
                                
 Pipeline attacks in OPEC member Nigeria last week shut
169,000 barrels per day (bpd) of Bonny Light production, forcing
Royal Dutch Shell <RDSa.L> to declare force majeure on crude
exports.
                                
 Nigerian rebels also attacked two Shell oil pipelines in the
Niger Delta on Monday.
                                
 Britain's Grangemouth oil refinery is proceeding with a
gradual shutdown ahead of a planned strike at the weekend.
Management and union members are in talks to try to avert the
strike which could disrupt fuel supplies in the UK. [nL23923985]
 (Additional reporting by Luke Pachymuthu in Singapore; editing
by James Jukwey)