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U.S. crude stocks forecast to rise by 2.6 million barrels

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China vows to 'transform' economy, sets growth target

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Oil's physical market has begun to tighten, ANZ says

(Recasts, adds quote in paragraph 4)

By Alex Lawler

LONDON, March 5 (Reuters) -

Oil slipped for a second day on Tuesday as concern over

China's plan for growth and uncertainty over the pace of U.S.

interest rate cuts offset the prospect of a tighter market due

to continued OPEC+ supply restraint.

China set an economic growth target for 2024 of around 5%,

similar to last year's goal and in line with analysts'

expectations, but the lack of big ticket stimulus plans to prop

up its struggling economy disappointed investors.

Brent crude fell 42 cents, or 0.5%, to $82.38 a

barrel by 1213 GMT, while U.S. West Texas Intermediate (WTI)

was down 39 cents, or 0.5%, to $78.35. Brent has gained

about 7% this year.

"Public enemy No 1 of a protracted rally and the $90 oil

price is the uncertainty surrounding interest rate cuts," said

Tamas Varga of oil broker PVM, who added that concern over

China's growth target was adding downward pressure.

The U.S. Federal Reserve is under no urgent pressure to cut

interest rates given a "prospering" economy and job market,

Atlanta Fed President Raphael Bostic was reported on Monday as

saying.

Some support came from the prospect of a tighter market

after members of the Organization of the Petroleum Exporting

Countries and its allies (OPEC+) on Sunday extended their

voluntary oil output cuts of 2.2 million barrels per day (bpd)

into the second quarter.

"The market has been moving higher in recent weeks amid

improving fundamentals. Rising spot prices indicate the physical

market has begun to tighten amid a host of other supply-side

disruptions," analysts at ANZ said in a note on Monday.

Even so, the latest round of U.S. inventory reports are

expected to show crude stocks increased about 2.6 million

barrels last week, while distillates and gasoline stockpiles are

forecast to decline.

The first of this week's two inventory reports, from the

American Petroleum Institute industry group, is due out at 2130

GMT.