Crude dips, choppy ahead of inventory data

* Dollar index weakness supportive to oil prices

* U.S. crude, gasoline stocks rose last week - API

* Coming up: EIA oil stocks data, 10:30 a.m. EDT Wednesday

NEW YORK, May 4 (Reuters) - U.S. crude oil futures edged lower on Wednesday in choppy trading ahead of government inventory data expected to show crude oil stocks rose last week, while a pressured dollar index remained supportive to oil.

The U.S. Energy Information Administration's weekly petroleum inventory report is due Wednesday at 10:30 a.m. EDT (1430 GMT).

U.S. crude oil stocks rose 3.2 million barrels last week, industry group American Petroleum Institute said in a report released late Tuesday. [API/S]

Gasoline stocks rose 680,000 barrels, but distillate inventories fell 1.5 million barrels, the API said.

Ahead of the API report, a Reuters survey of analysts yielded a forecast for crude stocks to be up 2 million barrels, with gasoline stocks up 300,000 barrels and distillates up 600,000 barrels. [ID:nN03100969]

Oil prices dropped more than 2 percent on Tuesday as an interest rate increase by India added to concerns about demand and gains in the dollar helped spark a technical sell-off.

FUNDAMENTALS

* On the New York Mercantile Exchange, June crude CLM1 slipped 40 cents, or 0.4 percent, to $110.65 a barrel by 8:38 a.m. EDT (1238 GMT), trading from $110.15 to $111.22.

* Asian refiners balked at Saudi Arabia's official selling prices announced on Tuesday, surprised by the kingdom's decision to sell Arab Light crude for June at the highest premium since 2007. [ID:nL3E7G40G6]

* Another cargo of Forties crude oil due to load in May has been dropped from the export program because of production problems, trade sources said. [ID:nWLA9448]

* Chinese inflation will moderate in the second half of the year as government measures to curb price rises hit their mark, a vice central bank governor said in remarks published on Wednesday. [ID:nL3E7G403Y]

* Yemen has stopped production and exports of crude oil from its offshore Ras Isa terminal in the Red Sea for over three weeks after a March attack on its main oil pipeline, a Yemen-based shipping source said. [ID:nLDE7431AL]

* Portugal and Greece talked up the benefits of Lisbon's decision to accept a bailout from the European Union and IMF, but the outlook for both countries and Ireland remains highly uncertain. [ID:nLDE7430OE]

* Libya's army fired volleys of rockets at the rebel-held town of Zintan in the Western Mountains, pressing on with a campaign that has created a humanitarian crisis and forced thousands to flee the country. [ID:nLDE7430NT]

MARKETS NEWS

* World stocks fell further from last week's three-year high as falling commodity prices and concerns about signs of economic slowdown in China prompted investors to scale back risky positions. [MKTS/GLOB]

* The euro rose against the dollar, edging closer to $1.50 on expectations low U.S. interest rates will keep the greenback weak. [FRX/]

* Silver continued its sharp fall from record highs for a third day and gold was also under correction pressure after the strong rally of recent weeks. [GOL/]

UPCOMING DATA/EVENTS

* U.S. Energy Information Administration oil inventory data to be released at 10:30 a.m. EDT (1430 GMT) on Wednesday.

* U.S. weekly initial jobless claims data to be released at 8:30 a.m. EDT 1230 GMT) on Thursday.

* U.S. Energy Information Administration natural gas storage data to be released at 10:30 a.m. EDT (1430 GMT) on Thursday.

* U.S. April nonfarm payrolls data at 8:30 a.m. EDT (1230 GMT) on Friday. 8:38 LAST NET PCT LOW HIGH CURRENT DAY AGO

8:38     LAST     NET    PCT     LOW    HIGH  CURRENT  DAY AGO

              CHNG   CHNG                      VOL      VOL
CLc1   110.65   -0.40  -0.4%  110.15  111.22   40,638  310,994
CLc2   111.16   -0.40  -0.4%  110.67  111.70   11,585   66,686
LCOc1  122.13   -0.32  -0.3%  121.72  123.06   64,898  194,435
RBc1   3.3098 -0.0196  -0.6%  3.3047  3.3369    3,729   52,022
RBc2   3.2582 -0.0179  -0.6%  3.2514  3.2831    2,358   23,341
HOc1   3.1830 -0.0078  -0.2%  3.1758  3.2061    4,670   47,482
HOc2   3.1981 -0.0083  -0.3%  3.1921  3.2215    1,343   13,977

* NYMEX crude oil for June CLc1 fell 40 cents to $110.65 a barrel by 8:38 a.m. in volume of 40,638 lots.

(Reporting by Robert Gibbons; Editing by John Picinich)