(Repeats with headline tag)
* OPEC looks likely to cut 2 million barrels per day
* Economic woes dim demand outlook
(Updates prices, adds Mexico OPEC comment)
By Annika Breidthardt
SINGAPORE, Dec 17 (Reuters) - Oil rose by more than a
dollar to above $44 on Wednesday as expectations that OPEC
would cut supplies further moved to centrestage, grabbing the
limelight from concerns about an ill-performing global economy
that is weighing on fuel demand.
A tumbling U.S. dollar on the back of the U.S. Federal
Reserve's interest rate cut to a record low also helped oil.
Oil ministers from the Organization of the Petroleum
Exporting Countries were near a consensus to cut output by 2
million barrels per day (bpd), the biggest reduction ever by
the producer group, ahead of Wednesday's meeting in Algeria.
[]
U.S. light crude for January delivery <CLc1>, due to expire
on Friday, rose $1 to $44.60 a barrel by 0526 GMT after having
fallen to $42.56 the previous session, just off a four-year
trough of $40.50 a barrel hit on Dec. 5.
London Brent crude for February delivery <LCOc1> was up
$1.25 at $47.90.
Oil prices have tumbled more than $100 from the July
all-time record above $147 a barrel as financial turmoil has
slowed down global economic growth and hit fuel demand.
"In the current economic outlook, a push for a higher price
through a deeper-than-expected cut can easily work against the
cartel's objective as it has the potential to turn sentiment on
the economy even more negative," said BNP Paribas Harry
Tchilinguirian.
"Establishing a price floor would be a more feasible
target, implying a lower cut announcement than expected," he
added.
In its monthly oil market report, OPEC said on Tuesday the
first drop in world oil demand in 25 years would sharply lower
the need for OPEC crude in 2009, opening the door for a
substantial production cut at its meeting.
For a breakdown on how the expected cut may look, click on
[]
Russia, the world's largest non-OPEC producer, sent a
high-level delegation to observe the meeting. Its deputy Prime
Minister Igor Sechin, said Russia could cut oil exports by as
much as 320,000 bpd but told Reuters that cooperation with OPEC
would progress only "step by step"
Azerbaijan said it could also contribute to any OPEC
decision.
But Mexico, which contributed to OPEC cuts in 1999 and
2001, said it would not weigh in this time as its oil output
was already declining. []
OPEC has already agreed to cut output by 2 million bpd at
two previous meetings, but demand has fallen faster and stocks
of oil are building up. OPEC said 45 million barrels of crude
oil are currently being stored at sea on oil tankers.
Crude oil stocks in top energy consumer the United States
are running near the top of their five-year range and
forecasters expect data to show they rose by another 300,000
barrels last week, according to a Reuters poll ahead of the
U.S. fuel inventory report due later in the session. []
(Reporting by Annika Breidthardt; Editing by Clarence
Fernandez)
