* Oil rebounds by more than $1/bbl after 4 pct overnight
fall
* Hopes of more cuts at OPEC meeting next week
* Bearish data likely from US energy weekly inventory
report
(Adds Asian stocks, quote, updated prices)
By Jennifer Tan
SINGAPORE, Dec 10 (Reuters) - Oil rebounded by more than $1
a barrel to just above $43 in light bargain hunting on
Wednesday, after having slumped 4 percent overnight on the back
of lowered forecasts for U.S. energy demand and fears of a
worsening global recession.
The market is looking ahead to producer cartel OPEC's Dec.
17 meeting, which is expected to agree more output cuts to
boost prices, and the release of the U.S. energy department's
weekly inventory report later on Wednesday, which is likely to
show rising crude stocks.
U.S. crude for January delivery <CLc1> was up $1.21 at
$43.28 a barrel by 0702 GMT, off a session high of $43.49. On
Tuesday, it fell $1.64, or 3.75 percent, to settle near a
four-year low of $42.07 a barrel on Tuesday.
London Brent crude <LCOc1> was up 82 cents at $42.35, off a
session high of $42.75.
"After last night's fall, we could be seeing some
bargain-hunting, but the volumes are not large. Overall, there
are no bullish factors to push up prices right now," said Ken
Hasegawa, a commodity derivatives sales manager at broker
Newedge in Tokyo.
"The economic picture is weighing on the market, and the
market is in waiting mode for next week's OPEC meeting."
Analysts expect oil prices to remain choppy, with a rising
interest to buy on weakness.
"We may see some buying with participants positioning ahead
of what could be a sharp supply cutback response by OPEC the
following Wednesday, but any gain will be shortlived, with the
focus squarely on deteriorating demand, rather than tightening
supply," ANZ said in client note.
U.S. stocks sank on Tuesday as negative retail sales data,
tepid home sales figures and profit warnings from firms sent
investors scrambling for the exits, ending a two-day rally that
had raised hopes the stock market may have hit a cyclical
bottom.
Reinforcing the dire economic outlook, Japan sank further
into recession in the third quarter, while fresh indicators
from Britain and France underscored the growing economic
contraction in Europe, and Canada declared itself in recession
on Tuesday.
One positive bit of news amid the gloom was the tentative
agreement reached by the White House and U.S. Congressional
Democrats on the bailout of struggling U.S. auto makers.
Asian stocks rallied 3 percent to a one-month high on
Wednesday as hopes rose that governments worldwide would step
in to help ailing companies and spend their way out of the
declines in growth.
In its monthly energy outlook, the U.S. Energy Information
Administration (EIA) said it expected global oil demand to fall
50,000 barrels per day in 2008 and 450,000 bpd in 2009 --
marking the first drop in world oil demand year-to-year since
1983.
The lower forecast came as the EIA revised its 2009 world
GDP growth estimate down to 0.5 percent from 1.8 percent last
month.
The EIA's weekly inventory data due later on Wednesday
could show that crude stocks rose 1.0 million barrels,
according to an expanded poll of 13 analysts by Reuters.
"The bearish data from the EIA tonight could put some
downward pressure on crude prices, but we do not expect any big
moves," Hasegawa said.
Producer grouping OPEC, which has faced a slide of more
than $100 a barrel in oil prices since July, has already agreed
to cut about 2 million bpd of production to support prices, and
members are leaning toward more supply cuts at the Algeria
meeting. []
OPEC kingpin Saudi Arabia, which has cited $75 a barrel as
a "fair price" for oil, will make bigger supply cuts to some of
its Asian and European customers next month, as it redoubles
efforts to arrest the steep slide in prices. []
"The market could be trading on some optimism that OPEC
might agree to cut more than 2 million barrels per day at next
week's meeting, but we don't think the rally is sustainable,"
Hasegawa added.
(Editing by Clarence Fernandez)
(jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)
