(Updates prices in para 2-3, adds U.S. president comments)
By Maryelle Demongeot
SINGAPORE, Jan 15 (Reuters) - Oil fell on Tuesday, on
fears a potential recession would hurt U.S. demand amid
forecasts of higher crude stocks, but the fall was limited by
Nigerian supply disruptions and geopolitical concerns about
Iran.
U.S. light crude for February delivery <CLc1> dropped 42
cents to $93.78 a barrel by 0819 GMT after leaping $1.51 on
Monday, snapping a three-day losing streak. The gains were also
aided by a weakening dollar, which lifted the whole commodities
complex.
London Brent <LCOc1> shed 22 cents at $92.69 a barrel.
Persistent worries of a recession in the world's biggest
economy have kept prices below their record high of $100.09 hit
on Jan. 3.
U.S. President George W. Bush said on Tuesday oil prices
were "very high" and tough for the U.S. economy to bear, adding
that he would discuss the issue with the king of OPEC
powerhouse Saudi Arabia.
"I would hope that as OPEC considers different production
levels that they understand that if... one of the biggest
consumers' economy suffers it means less purchases, less oil
and gas sold," Bush said at a round table meeting with
entrepreneurs. [].
The Organization of the Petroleum Exporting Countries would
raise oil output if needed at meetings on Feb. 1 and March 5,
OPEC Secretary-General Abdullah al-Badri told Reuters on
Monday.
Former U.S. Federal Reserve Chairman Alan Greenspan said
the U.S. economy was probably in a recession or about to slide
into it.
The odds are "not overwhelming but they are marginally in
that direction" Greenspan was quoted as saying in an interview
with The Wall Street Journal.
OIL STOCKS
U.S. crude stocks could also start rebounding. A Reuters
poll of analysts forecast data from the U.S. Energy Information
Administration showing a 1.2 million-barrel rise in crude
inventories in the week to Jan. 11, as imports bounced from a
sharp drop. []
Distillate stocks were seen building by 1.2 million barrels
while gasoline should rise by 2.5 million barrels.
"Macro concerns have been setting the ceiling (for prices),
while crude stockdraws, which have continued from the fourth
quarter into early January, have been setting the floor,"
analysts at Societe Generale wrote in a research note.
But supply disruptions, geopolitical tensions in the Middle
East and the weak dollar continued to offer support, keeping
prices in the $90-100 a barrel range.
"People realise that oil is going to be relatively tight
despite the recession, despite the slowdown in OECD," said Tony
Nunan, manager at Mitsubishi Corp's risk management unit.
Royal Dutch Shell <RDSa.L> declared force majeure on crude
shipments from its Forcados export terminal in Nigeria
following sabotage to two pipelines last week.
The 380,000 barrels per day (bpd) Forcados field, which was
shut for almost two years by a string of militant attacks in
February 2006, had partially resumed pumping in the middle of
last year []. Militant raids since 2006 have
knocked out a fifth of the country's oil output capacity.
Similar fears of supply upsets from Iran, the
fourth-largest crude oil exporter, reemerged after President
Bush accused Tehran of threatening global security by backing
militants and urged his Gulf Arab allies to confront the issue.
[]
A weak dollar has also helped firm prices for commodities,
with gold surging to record highs on Monday as investors fled
to safer commodities on growing talk of a recession. []
The dollar held on Tuesday near seven-week lows against the
euro and yen on concerns that some of the largest U.S. banks
will report weaker earnings this week, heightening expectations
for more Federal Reserve interest rate cuts. []
(Editing by Ramthan Hussain)
