Oil falls towards $118 from record-peak, eyes on Fed

PERTH, April 29 (Reuters) - Oil eased towards $118 on Tuesday as focus turned to the dollar, after hitting a record a day ago on supply snags in Nigeria and Britain that have combined to shut nearly 2 million barrels per day (bpd) of Atlantic Basin output.

U.S. light crude for June delivery CLc1 shed 25 cents to $118.50 a barrel by 0328 GMT. It closed 23 cents higher at $118.75 on Monday, after striking a record high of $119.93.

London Brent crude LCOc1 fell 22 cents to $116.52.

"The issues in Nigeria and North Sea are significant but these outages tend to be overcome pretty quickly, so I think the market is taking profit from record prices," said Mark Pervan, a senior commodities analyst at the Australian & New Zealand Bank.

Pervan said investors could also be pulling out funds from the energy sector to invest in the U.S. dollar, which could get support from expectations the Federal Reserve would trim its funds rate by a slim 25 basis points to 2 percent and signal a desire to hold rates for the time being. [nFEDAHEAD]

Nigeria's crude oil output was cut by around half on Monday by striking workers at Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and recent attacks by rebels on Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz) operations.

Exxon Mobil said it had shut virtually all its Nigerian output, close to 800,000 bpd, due to the five-day-old strike. [ID:nL28161600]

Niger Delta rebels, meanwhile, have said an April 24 pipeline attack had shut down a further 350,000 bpd of production by Royal Dutch Shell. A previous bombing raid had hit 169,000 bpd of Shell's Nigeria output, the company said last week.

In Britain, the 700,000-bpd Forties North Sea crude pipeline, which carries nearly half of the country's oil, remained closed on Monday due to a strike over pensions at the 210,000-bpd Grangemouth refinery.