* Talk of OPEC raising output cools prices
* Brent-WTI spread spikes to more than $12/bbl
* Technicals show U.S. crude to fall to $83.50
* Coming Up: First reading on U.S. Q4 GDP at 1330 GMT
(Adds quotes, updates prices)
By Florence Tan
SINGAPORE, Jan 28 (Reuters) - U.S. crude futures fell on
Friday to a near two-month low on weak economic data and talk of
OPEC raising output to cool prices, while a rosier outlook for
Europe supported Brent.
Jobless claims rose in the U.S. overnight while the head of
Kuwait Petroleum Corp said OPEC may need to boost output as high
oil prices threaten the global economy.
Farouk al-Zanki, head of Kuwait Petroleum Corp, told Reuters
in Davos, Switzerland, he is concerned that current high oil
prices may contribute to the start of another global downturn as
they did in 2008.
"The first signs are emerging that OPEC is responding, with
a thinly veiled call for an emergency OPEC meeting by a Kuwaiti
official and indications others are unilaterally raising
output," JPMorgan analysts led by Lawrence Eagles said in its
monthly oil report.
U.S. crude oil for March delivery fell 15 cents to
$85.49 a barrel at 0449 GMT and is on track to extend its
decline for a second straight week.
ICE Brent crude for March rose 38 cents to $97.77 a
barrel.
Prices in the OPEC price basket have not risen high enough
to justify a change in production quotas, said Ben Westmore,
commodities economist at National Australia Bank.
However, "if this price trend continues, it's likely that
OPEC will look at raising output within the next six to 12
months," he said.
The divergence in price movements of the two oil markers has
pushed Brent crude's premium against U.S. benchmark crude, also
known as West Texas Intermediate, to its highest since 1988. The
spread surged to $12.18 a barrel on Jan. 27 at settlement.
Near-record stocks in Cushing, Oklahoma, the delivery point
for WTI contracts, have caused the prompt-month spreads to
collapse "and the market is now firmly in the supercontango
zone," JPMorgan said in a Jan. 27 note.
In a contango market, the price of oil is progressively more
expensive in future months than the front month.
More Canadian crude is expected to flow into Cushing in
March through an extension of the Keystone pipeline even though
additional storage capacity is being added, JPMorgan said.
"The risk of a really wide spread of $20-$30 to Gulf Coast
crudes is not insignificant during the refinery maintenance
season," the bank said.
Reuters markets analyst Wang Tao said technical charts
showed that Brent's premium to WTI crude <CL-LCO1=R> will rise
to $15.30-$17.63 per barrel over the next four weeks.
However, some analysts were sceptical that the Brent-WTI
premium would stay high given that spikes have collapsed
previously.
"I do expect Tapis and Brent prices to be more in line with
WTI" which is a better reflection of the fundamentally weak oil
market than other benchmarks, Westmore said.
The first reading of U.S. economic growth in the fourth
quarter will be released later on Friday.
U.S. economic growth likely accelerated in the fourth
quarter of 2010, with consumer spending predicted to have
increased at its fastest pace in three years.
The anticipated 3.5 percent annual growth rate would be the
quickest since the first quarter of last year.
(Reporting by Florence Tan; Editing by Manash Goswami)
