Oil steadies near $122 ahead of U.S. inventory data

By James Topham

TOKYO (Reuters) - Oil took a breather near $122 a barrel on Wednesday ahead of key U.S. weekly inventory data, after hitting new record the previous day on supply concerns and a forecast of oil reaching over $200 a barrel within two years.

U.S. crude for June CLc1 was down 4 cents at $121.80 a barrel by 3:36 a.m. British time, off Tuesday's new intraday all-time high of $122.73. The contract settled up $1.87 at a record $121.84.

London Brent crude LCOc1 was 16 cents lower at $120.15 a barrel, down from the record $120.99 hit on Tuesday.

"The market is in a waiting mode before U.S. inventory data comes out," said Yusuke Seta of brokerage company New Edge.

A weekly U.S. government report on fuel inventories is expected to show a 1.6 million barrel build in crude supplies, an 800,000 barrel rise in distillate inventories and a 100,000 barrel decline in gasoline stocks, a Reuters poll showed. <EIA/S>

Analysts said a higher-than-expected draw in crude or gasoline stocks in the world's largest energy consumer could pull prices higher.

The U.S. Energy Information Administration petroleum inventory data is due out on Wednesday at 3:30 p.m. British time.

Oil's new records on Tuesday extended a rally that has seen prices double over the past year, and led some experts to forecast a potential spike to $200.