* Brent rebounds by 1.4 pct as dollar weakens 0.16 pct
* Support for U.S. crude seen at $94-$95/bbl -analyst
* U.S. crude stockpiles fell 3.4 million barrels last week
By Alejandro Barbajosa
SINGAPORE, June 16 (Reuters) - Oil rebounded on Thursday, with Brent up 1.4 percent, after the previous day's sharp drop and a falling dollar created buying opportunities against a backdrop of tumbling U.S. crude inventories and uncertainty over OPEC output.
Brent crude for August
On Wednesday, U.S. crude plunged to $94.81, the lowest settlement since Feb. 22, on signs of economic weakness as manufacturing unexpectedly shrank in the state of New York.
"It's a little bit of buying on weakness after the significant fall overnight, and also dollar weakness is causing prices to rise," said Ben Westmore, a commodities analyst at National Australia Bank.
"The economic data wasn't calamitous by any means, so there's support for WTI at $94-$95."
U.S. crude inventories last week fell by 3.4 million barrels, more than twice as much as forecast, government data showed on Wednesday. They remain about 7 percent above their five-year average.
"There are still abundant stocks of oil globally but that abundance is likely to abate in the second half if we continue to see weak production levels from OPEC," Westmore said. "We know how foggy OPEC policy can be, and I wouldn't rely on Saudi Arabia increasing output until we see it in the numbers."
Saudi Arabia is expected to unilaterally increase crude production towards 10 million barrels per day (bpd) this month, sources said on Tuesday, up from about 8.86 million bpd in May, after the Organization of the Petroleum Exporting Countries last week failed to reach an agreement on output.
Any increase in output from OPEC countries in the Middle East would take weeks to be reflected in U.S. inventories.
Crude stockpiles at Cushing, Oklahoma, the pricing point for WTI crude traded on the New York Mercantile Exchange, were down 1.14 million barrels at 37.76 million barrels, easing a glut that has weighed on U.S. benchmark crude prices this year.
U.S. imports from Canada fell 381,000 bpd for the week to their lowest level since December after the 591,000-bpd Keystone pipeline from Canada was shut for a week, helping to drain Midwest stocks. The line reopened for service on June 5.
In oil-producing North Africa, fights continued as Libyan rebels have pushed deeper into government-held territory from their base in the Western Mountains, taking two villages from which forces loyal to Muammar Gaddafi had been shelling rebel-held towns.
The United States said on Wednesday tensions in Bahrain were very high ahead of a planned national dialogue after weeks of pro-democracy demonstrations and urged the authorities to encourage people to speak out.
(Editing by Clarence Fernandez)