* OPEC cuts support, U.S. crude stocks seen up
* IMF set for sharp cuts in global growth forecasts
* Reuters poll shows global demand to fall sharply in 2009
(Recasts, updates prices)
NEW YORK, Jan 21 (Reuters) - Oil rose over $2 a barrel on
Wednesday as OPEC supply cuts outweighed additional evidence
that a deepening global slowdown is crushing demand for fuel.
U.S. light crude for March delivery <CLc1> climbed $2.22
to $43.06 a barrel by 2:20 p.m. EST (1920 GMT) on its first day
as the front month contract.
London Brent crude <LCOc1> rose $1.21 to $44.83 a barrel.
OPEC is fully enforcing its deepest ever oil supply curbs,
which should be enough to boost prices, the group's president,
Angolan oil minister Botelho de Vasconcelos, told Reuters.
Oil has plunged from record highs above $147 a barrel in
July as the global economic crisis lowered oil consumption,
prompting the Organization of the Petroleum Exporting Countries
(OPEC) to agree to a series of output cuts.
But some market analysts said the balance of the market may
soon shift.
"Frankly, we don't know that inventories at Cushing,
Oklahoma are going to just mount to the sky... at some point,
the OPEC production cuts are going to rebalance the market,"
Tim Evans, energy analyst for Citi Futures Perspective, in New
York.
"If the U.S. market is to sustain an ongoing flow of crude
oil, it will have to bid at a price level that is competitive
with the Brent market," he added.
Crude was also supported by the weakness in the U.S. dollar
against the euro and the yen, even as the sterling fell to a
7-1/2 year low against the dollar.
Trade was focused on the March front-month futures,
narrowing the difference in price between March futures and
futures contracts.
"The contango is shrinking, with a new front-month, which
is a sign that the market may be headed for a turnaround here
... the market seems to be waiting for news on how exactly the
Obama administration will tackle our economic problems," said
Mark Waggoner, president at Excel Futures in Huntington Beach,
California.
A contango market condition is present when the front-month
futures are lower priced than further out futures contracts.
FALLING DEMAND, HIGHER INVENTORIES
The International Monetary Fund is set to sharply cut
growth forecasts this month and the world will not return to
strong growth for two to three years, IMF Managing-Director
Dominique Strauss-Kahn said on Wednesday.[]
A Reuters poll on Wednesday showed 10 analysts, banks and
industry groups expected global oil demand to contract more
sharply in 2009 than they had forecast previously, as the
economic crisis spreads to the developing world.
World oil demand was predicted to fall by 430,000 barrels
per day (bpd) in 2009 to 85.43 million bpd.
China, one engine in the six-year commodity price rally
that started in 2002, was expected to release fourth-quarter
GDP data this week that economists say will show 7.0 percent
growth, the slowest pace of expansion in nearly a decade for
the world's third-biggest economy.
Another Reuters poll of analysts forecast that crude oil
stocks in the United States, the world's top energy consumer,
rose by 1.4 million barrels last week, with distillate stocks
seen down 1.4 million barrels due to cold winter weather.
Gasoline stocks are expected to be up 2.1 million barrels,
up 5.1 million barrels from a year ago.
Data will be released on Thursday, a day later than usual,
following the U.S. holiday on Monday honoring civil rights
leader Martin Luther King Jr.
(Additional reporting by Robert Gibbons and Gene Ramos in New
York, David Sheppard in London; Maryelle Demongeot in
Singapore; Editing by David Gregorio)
