* IEA predicts rising U.S. supply
* U.S. crude inventories rose by 1.1 mln bbls, above f'cast -API
* Brent to drop to $101.35 -technicals
* Coming Up: U.S. EIA weekly crude stocks; 1430 GMT (Adds comments, updates prices)
By Manash Goswami
SINGAPORE, May 15 (Reuters) - Brent futures held steady above $102 a barrel on Wednesday, as the U.S. dollar eased, but gains were capped by forecasts of rising supplies from the United States amid a bleak outlook for global demand growth.
Oil is also drawing support from equities, with Wall Street rallying without a significant correction since the start of the year, pushing major indexes to all-time highs.
Brent is down some 14 percent from its 2013 peak, however, as demand in China weakens and stockpiles in the United States touch record peaks. The International Energy Agency's (IEA) report on shale oil production further weighed on sentiment.
Brent crude had gained 5 cents to $102.65 a barrel by 0530 GMT, after settling 22 cents lower. The contract is $16 below this year's high of $119.17. U.S. oil climbed 11 cents to $94.32. It had fallen for four straight days, with the longest previous losing streak of five days in December.
"The strong performance in equity markets is helping oil," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.
"But both data from the United States and comments by the IEA show that demand is weak while supplies are rising, and that is posing a downside risk for oil."
The dollar pulled back slightly on Wednesday, also helping oil inch up. Signs of an improving U.S. economy have boosted the currency in the last few days to multi-year highs. A firm dollar pressures oil as its strength makes commodities more expensive for holders of other currencies.
Rising U.S. shale oil production will help meet most of the world's new demand in the next five years, even if the global economy picks up steam, the West's energy agency, the IEA, said.
It also said OPEC's spare capacity will rise by over a quarter to reach 6.4 million bpd, or 6.6 percent of global demand, giving an additional cushion to potential supply shocks.
"North America has set off a supply shock that is sending ripples throughout the world," IEA Executive Director Maria van der Hoeven said.
The American Petroleum Institute (API) reported that crude inventories rose 1.1 million barrels in the week to May 10, far higher than forecast.
The gain was led by an increase of more than 750,000 barrels in Midwest stockpiles. Crude stockpiles at the Cushing, Oklahoma, hub for the U.S. oil futures contract climbed more than 540,000 barrels for the week.
Investors await data from the U.S. Department of Energy's Energy Information Administration (EIA) later in the day to gauge the country's demand outlook.
"Signs of rising output from OPEC and ongoing builds in U.S. oil inventories (according to industry data) dampened sentiment," ANZ analysts said in a note.
Brent is expected to drop to $101.35 as it is riding on a downward wave c, while U.S. oil should drop to $92.43, Reuters technical analyst Wang Tao says. (Reporting by Manash Goswami; Editing by Clarence Fernandez)