UPDATE 1-Oil up over $1 after 4-year low under $41

                                
 * Heads for first rise in 7 days after hitting 4-year-low
                                
 * Prices fell 25 pct last week, biggest drop in nearly 18
yrs
                                
 * As economy gloom deepens, all eyes turn to OPEC
 (Adds details)
                                
 TOKYO, Dec 8 (Reuters) - Oil rose more than $1 on Monday,
clawing back a fraction of last week's near-record decline
after negative economic data heightened fears about the impact
of a global recession on fuel demand, especially in the United
States.
                                
 U.S. crude for January delivery <CLc1> rose $1.42 to $42.23
a barrel by 0005 GMT, after closing on Friday at $40.81, the
lowest settlement since Dec. 10, 2004. Oil shed a quarter of
its value last week, the sharpest weekly fall since January
1991.
                                
 London Brent crude <LCOc1> rose $1.39 to $41.13 a barrel.
                                
 Friday's steep losses came after a U.S. report showed the
heaviest job losses in 34 years in the world's top energy
consumer, adding to concerns that people have not yet seen the
full extent of the damage being wrought on the
economy.[ID:nHKG345012]
                                
 Analysts who just months ago were predicting prices would
remain at or near the $147 record high touched in July have
slashed price and demand forecasts on the mounting economic
gloom, with Merrill Lynch <MER.N> predicting oil could drop to
$25 a barrel if the global recession extends to China.
                                
 The International Energy Agency lowered its forecast for
global annual demand growth to 1.2 percent from 1.6 percent in
its previous forecast, banking on China and other emerging
economies to offset loses in developed markets. [ID:nL5111738]
                                
 The rapid, steep retracement of oil prices has prompted
OPEC members to call for increasingly strong action when the
Organization of the Petroleum Exporting Countries meets next,
on Dec. 17 in Algeria. [ID:nL3531815]
                                
 OPEC has already agreed to cut about 2 million barrels per
day (bpd) of production, although not all members appear to be
contributing their share of the cut-backs.
                                
 Iran is producing over 4 million bpd, the head of the state
oil firm was quoted as saying on Saturday, roughly 250,000 bpd
more than an estimate provided by the country's OPEC governor
and far in excess of its OPEC quota. [ID:nDAH633323]
                                
 Retail prices are now in sharp decline around the world,
with India cutting pump rates for the first time in nearly two
years on Friday and China preparing to do the same, although
analysts doubt that will spur fuel demand as a global recession
takes hold.
                                
 The average price of gasoline in the United States fell to
a four-and-a-half-week low last week, and prices could ease a
bit more amid larger U.S. stocks and flat demand, according to
the nationwide Lundberg survey released on Sunday.
[ID:nN07468726]
 (Reporting by Osamu Tsukimori; Editing by Jonathan Leff)