* OPEC should make more severe output cut-president
* Russia says ready to work with OPEC on output cuts
* Dollar drops to seven-week low
* IEA predicts 2009 oil demand growth
(Updates with Brent settlement prices)
By Rebekah Kebede
NEW YORK, Dec 11 (Reuters) - Oil surged more than 10
percent on Thursday, settling at nearly $48 a barrel after the
OPEC president called for more "severe" production cuts and the
dollar fell to a seven-week low versus the euro.
News that Russia's President Dmitry Medvedev said the
country was ready to work with OPEC on possible oil output cuts
lent additional support to the market.
"We are starting to see the real engine for lifting oil
prices, cuts in OPEC production, and it seems likely they will
cut production at their meeting next week," said Tim Evans,
energy analyst for Citi Futures Perspective.
"Also in the background is Russia rumbling about possible
coordination with OPEC and that is bullish if carried out," he
added.
U.S. crude <CLc1> settled at $47.98 a barrel, up $4.46, or
10.25 percent, continuing a rebound from near four-year lows
hit last week. It was the biggest single-day percentage gain
since Nov. 4, when prices ended up 10.36 percent.
European benchmark Brent crude <LCOc1> settled at $47.39,
up $4.99.
Oil prices are down almost $100 from a record peak of
$147.27 scaled last summer as a global financial crisis hits
consumer demand for fuel.
OPEC should agree on a more "severe" reduction in output at
the meeting next week in Algeria, OPEC President Chakib Khelil
said in remarks published on Thursday, which made no mention of
a figure. []
Saudi Oil Minister Ali al-Naimi said the world's largest
exporter pumped 8.49 million barrels per day of oil in
November, less than estimated by analysts and in line with its
OPEC target.
That would put the kingdom's output at 560,000 bpd less
than the IEA's estimate of Saudi November production, published
earlier on Thursday, of 9.05 million bpd.
Industry sources told Reuters on Wednesday they expected
January shipments to be below Saudi's existing OPEC target,
implying it expects OPEC to agree a further supply cut when the
producer group meets in Algeria on Dec. 17.
OPEC member Ecuador also said it wants to slash oil output
at the Algeria meeting to stabilize the market.
[]
Russia, which will attend the Algerian meeting as an
observer amid calls from some members for Moscow to join in
output curbs, said Wednesday it will present its own proposal
at the talks.
The U.S. dollar weakened after data on weekly U.S. jobless
claims came in worse than expected []. A weak
dollar can boost investor demand for oil and other
dollar-denominated commodities.
RETURN OF DEMAND
A prediction from the International Energy Agency that
world oil demand growth would rebound in 2009 after shrinking
this year for the first time since 1983 was also supportive.
The IEA also cut forecasts for supply outside OPEC next year.
[]
The IEA's view that demand will grow in 2009 contrasts with
that of the U.S. government's Energy Information
Administration, which this week forecast consumption would fall
by 450,000 barrels per day (bpd) next year.
The Paris-based IEA also lowered forecasts for supply from
outside OPEC in 2009, leading to a 200,000 bpd increase in the
amount it said OPEC needs to pump to balance the market.
(Additional reporting by Alex Lawler in London, Anna Mudeva in
Poznan and Jennifer Tan in Singapore; Editing by Christian
Wiessner)
