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UPDATE 2-Oil dips on rising U.S. supplies, market still tense on conflict in Syria

Syria@

* Eurocontrol warns of possible air strikes in next 72 hours

* Brent hit its highest level since 2014 late on Tuesday

* Rising U.S. output, inventories loom over oil markets (Adds Falih comment, updates prices)

SINGAPORE, April 11 (Reuters) - Oil prices on Wednesday eased away from 2014 highs reached the previous session as escalating Middle East tensions were offset by increasing inventories and production in the United States.

Brent crude futures fell to $70.80 per barrel at 0702 GMT, down 23 cents, or 0.3 percent, from their last close. Brent surged more than 3 percent on Tuesday to hit its highest level since late 2014, at $71.34 a barrel.

U.S. WTI crude futures were at $65.40 a barrel, down 11 cents, or 0.2 percent from their last settlement.

Markets have been tense on escalating tensions in the Middle East.

The United States and its allies are considering air strikes against Syrian President Bashar al-Assad's forces following a suspected poison gas attack last weekend.

Pan-European air traffic control agency Eurocontrol said late on Tuesday that air-to-ground and/or cruise missiles could be used within the next 72 hours, warning of intermittent disruption of radio navigation equipment.

Though Syria is not a significant oil producer itself, the wider Middle East is the world's most important crude exporter and tension in the region tends to put oil markets on edge.

There are also concerns that the United States could renew sanctions against Iran, a major Middle East oil producer.

"Oil prices are towering on the heightened tension in the Middle East," said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

Not all oil market indicators pointed to ongoing price rises, however.

U.S. crude inventories rose by 1.8 million barrels in the week to April 6 to 429.1 million, according to a report by the American Petroleum Institute (API) on Tuesday, compared with analysts' expectations for a decrease of 189,000 barrels.

OANDA's Innes said the API report had "temporarily taken a bit of wind out of the market".

Adding to rising storage levels, the U.S. Energy Information Administration (EIA) said on Tuesday that it expects domestic crude oil production in 2019 to rise by more than previously expected, driven largely by growing U.S. shale output.

In its monthly short-term energy outlook, the agency forecast that U.S. crude oil output will rise by 750,000 barrels per day (bpd) to 11.44 million bpd next year. Last month, it expected a 570,000 bpd year-over-year increase to 11.27 million bpd.

That will likely make the United States the world's biggest oil producer by 2019, surpassing Russia which currently pumps out almost 11 million bpd.

Saudi Arabia Energy Minister Khalid al-Falih said on Wednesday that the world's biggest exporter of crude oil will not sit by and let another supply glut surface, implying that the de-facto leader of the oil producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) would continue to withhold supply in order to tighten markets and prop up prices. (Reporting by Henning Gloystein Editing by Richard Pullin and Kenneth Maxwell)