* Saudi Arabia to pump below OPEC target, ready to cut more
* U.S. crude inventories expected to rise
* Cold snap in U.S. Northeast offers support
(Adds details, updates prices, changes dateline from PERTH)
By Joe Brock
LONDON, Jan 14 (Reuters) - Oil rose more than 3 percent to
above $39 a barrel on Wednesday as OPEC kept up talk of
production cuts and a cold snap in the United States boosted
heating oil demand.
Top exporter Saudi Arabia said on Tuesday it was prepared to
go even further than cuts it had made since December if the
market warranted it, while OPEC's secretary general said the
cartel may reduce oil output again at its meeting in March.
But analysts said downside risks remained high. A U.S.
government report due later in the day is expected to show crude
oil stocks rising for the third consecutive week, by more than 2
million barrels.
U.S. light crude for February delivery <CLc1> rose $1.30 to
$39.08 a barrel by 0834 GMT. London Brent crude <LCOc1> gained
50 cents to $45.33.
"Oil was boosted by U.S. weather and Saudi Arabia's comments
in the previous session but the trend is still down, with lower
energy demand in focus," Michelle Kwek, an analyst at Informa
Global Markets in Singapore, said.
"The EIA data due later is also expected to show a build-up
in stocks and that will again reflect waning demand in the
United States."
U.S. crude oil stocks have swelled as demand in the top oil
consumer wilts, pushing U.S. crude futures into a deep discount
compared with Brent crude.
A Reuters poll ahead of Wednesday's U.S. inventory report
saw a 2.2 million barrel build in crude stockpiles in the week
to Jan. 9, and distillate and gasoline supplies rising by 1.1
million and 1.6 million barrels respectively. []
SAUDI CUTS
The global financial crisis, the worst since the 1930s, has
pushed much of the industrialised world into recession, causing
oil demand to slump and crude prices to tumble by more than $100
from its record peak of above $147 a barrel last July.
Saudi Oil Minister Ali al-Naimi said on Tuesday the world's
biggest exporter would pump below its OPEC production target of
8.05 million barrels per day (bpd) in February and is prepared
to go even further to halt the drop in prices.
"If there is a need to do more, we will do so because our
purpose is to bring things in balance," Naimi told reporters in
New Delhi, adding that Saudi Arabia alone has already cut
supplies by 1.7 million bpd. []
OPEC's secretary general also said the cartel may cut oil
output further at its meeting in March if the market remains
oversupplied a month from now [], while OPEC-member
Qatar said a price of $70 a barrel was right for oil as it
allows companies to invest in new resources [].
The grouping of oil producers agreed last month to its
largest ever production cut of 2.2 million bpd, bringing cuts
since September to 4.2 million barrels, or around 5 percent of
world supply.
Oil's gain on Wednesday was also buoyed by a cold snap in
the U.S. Northeast, the world's biggest heating oil market, with
temperatures forecast to be well below normal in the next week.
[]
The winter chill is expected to cause heating oil demand to
be 13.7 percent above normal this week, the National Weather
Service said. []
(Additional reporting by Fayen Wong in Perth; Editing by Sue
Thomas)
