UPDATE 5-Oil rises after Korea talks feed risk appetite

* IEA sees strong global oil demand growth to 2023

* OPEC, U.S. shale producers gather in Houston for CERAWeek

* 2018 Brent price forecast at $67/bbl -BMI Research (Updates prices, adds comment)

LONDON, March 6 (Reuters) - Oil rose on Tuesday, paring earlier losses after South Korea said it would hold a summit with North Korea for the first time in more than a decade, which investors took as a cue to sell the U.S. dollar and buy risk-sensitive assets such as commodities.

The prospect of OPEC and other producers, including Russia, maintaining crude output cuts in the face of a boom in U.S. shale production has helped to push oil back above $65 a barrel this week.

Brent crude futures were last up 46 cents on the day at $66 a barrel by 1230 GMT, having risen from a session low of $65.30, while while U.S. West Texas Intermediate futures were up 51 cents at $63.08.

The dollar fell to its lowest in more than a week against a basket of currencies after a senior delegation from South Korea returned from a visit to the north, which said there was no need to keep its nuclear programme as long as there was no military threat against it and the safety of its regime was secured.

"The comments on North Korea denuclearisation have caught the market a bit off-guard and so the dollar has weakened and commodities have received a boost," said Saxo Bank senior manager Ole Hansen.

"Oil seems to be more driven by outside macro forces than what is happening within the sector."

The price had eased closer to $65 in earlier trading, pressured by the International Energy Agency's (IEA) warning on Monday that U.S. oil output is set to surge over the coming five years.

U.S. crude production has risen to more than 10 million barrels per day (bpd), overtaking top exporter Saudi Arabia. Output hit a record 10.057 million bpd in November, according to the U.S. Department of Energy.

"If the production growth in Brazil, Canada and Norway is factored into the equation, these four countries will even exceed demand growth," Commerzbank analysts said in a note.

"According to the IEA, the call on OPEC is therefore set to decline to 31.8 million barrels per day in 2019, thereby falling below OPECs current production level. It is thus an illusion for OPEC to think about abandoning the agreement to cut production."

Weekly U.S. crude inventory data is expected to show a second consecutive weekly rise in the week to March 2, according to a Reuters poll. The American Petroleum Institute (API) will release its weekly inventory data at 4.30 p.m. EST (2130 GMT) on Tuesday, and the U.S. Energy Department's Energy Information Administration (EIA) reports its data at 10.30 a.m. EST (1530 GMT) on Wednesday. (Additional reporting by Jane Chung in SEOUL Editing by Jane Merriman and David Goodman)