* Oil rebounds after AIG rescue
* Goldman Sachs cuts oil price forecast
(Adds analyst comment, updates prices)
LONDON, Sept 17 (Reuters) - Oil rebounded on Wednesday after
the $85 billion U.S. government rescue of insurer American
International Group appeared to reassure global financial
markets.
U.S. light crude for October delivery <CLc1> was up $2.70 at
$93.85 a barrel at 1044 GMT after a session high of $95.00.
On Tuesday, it had fallen to a seven-month low in a broad
cross-market sell-off.
London Brent crude for November delivery <LCOc1> was $2.48
up at $91.70.
Oil has fallen more than $10 in the past two days alongside
a plunge in global financial markets, following the bankruptcy
of U.S. investment bank Lehman Brothers and fears over the
survival of global financial services group AIG.
"I think it was a flight of capital out of the futures
markets and now we are coming back to fundamentals," said Simon
Wardell of Global Insight in London.
"I think a lot of that (investor) cash is out of commodities
and will stay out," said Wardell. "We've had outages in the Gulf
of Mexico, and I think a lot of that was overlooked," he said.
Fresh attacks on Nigerian oil installations and supply
disruptions in the United States after Hurricane Ike provided
some support to the market.
These had been largely ignored earlier this week as
investors focused on the credit crunch.
Oil is down by more than a third from a record peak of
$147.27 on July 11, partly due to a reduction in demand from top
energy consumer the United States, where economic growth is
flagging.
The fall accelerated this week because of financial market
fallout from the collapse of Lehman and AIG's troubles.
"Everyone feared there would be a big meltdown in the
financial sector that would affect the economy. Now they are
hoping we'll just get through the AIG situation and that may be
lifting the market," said Anthony Nunan, a risk management
executive at Tokyo-based Mitsubishi Corp.
AIG's problems and Lehman Brothers' bankruptcy had triggered
an investor flight to safe haven assets such as government bonds
and gold.
Gold climbed on Wednesday in line with a relief rally across
the commodities spectrum after the rescue of AIG. <XAU=>
Goldman Sachs, until now the most bullish investment bank on
oil prices, cut its average 2009 U.S. crude oil price forecast
by $25 to $123 a barrel.
"We stand by our bullish view on oil, but just think it will
now take longer to get to our previous price target," the bank
said.
The market will focus later in the session on latest weekly
inventory data from the U.S. Energy Information Administration
that could show some of the impact on U.S. fuel supplies from
Hurricans Gustav and Ike.
Crude oil supplies are forecast to have fallen by 3.8
million barrels last week, gasoline by 3.8 million and
distillates by 1.9 million. []
(Reporting by Jane Merriman and Matthew Robinson in London and
Annika Breidthardt in Singapore, editing by Anthony Barker)
