* Jumps 5 pct from 4-year low, Asia stocks up after Wall St
* Prices fell 25 pct last week, biggest drop in nearly 18
yrs
* As economy gloom deepens, OPEC may need bigger surprise
* Saudi Arabia maintains oil supply curbs to Asia in Jan
(Updates prices, adds Saudi curbs para 2, 15, Asia stocks para
6)
TOKYO/SINGAPORE, Dec 8 (Reuters) - Oil jumped 5 percent to
$43 a barrel on Monday, clawing back a share of the near-record
decline last week when negative economic data heightened fears
about the impact of a global recession on fuel demand.
News that Saudi Arabia would maintain -- though not deepen
-- oil supply cuts to Asian oil refiners in January helped add
to early gains fed by a jump in equity markets, but traders
were looking ahead to a U.S. auto sector bailout and next
week's OPEC meeting in Algeria to sustain the first rise in
seven days.
U.S. crude for January delivery <CLc1> rose $2.09 to $42.90
a barrel by 0347 GMT after closing on Friday at a two-year low
of $40.81. Oil shed a quarter of its value last week, the
biggest weekly fall since January 1991.
London Brent crude <LCOc1> rose $1.71 to $41.45 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 we have not yet seen the full
extent of the damage being wrought on the economy.
[]
But battered U.S. equity markets managed to squeeze out 3-4
percent gains by Friday's close thanks to a late rally, aided
in part by low oil prices. That positive feedback loop came
full circle to boost sentiment in crude on Monday as Asian
markets also rallied, with the Nikkei <.T> up 5 percent,
traders said.
"People are now buying back short positions after the
rebound in U.S. equities last Friday," said Tetsu Emori, a
commodities fund manager at Japan's Astmax Co. Ltd.
In the week to Dec. 2, just as prices had begun the latest
leg down, crude oil market speculators pared their tiny net
long positions marginally, data showed on Friday.
[]
"We are also looking at the relief plan for the auto
makers, that will be quite important," said Emori.
White House and congressional negotiators worked on Sunday
to iron our remaining differences over an emergency rescue for
the struggling auto industry in a move that Emori said should
provide a sentiment boost for financial markets.
[]
Monday's rally spanned the commodities complex after the
Reuters-Jefferies CRB <.CRB> index of 19 commodities plunged 14
percent last week, its biggest ever weekly decline.
DEMAND AILS
Just five months after oil hit a high of over $147,
analysts are now slashing their price and demand forecasts.
Merrill Lynch <MER.N> said oil could drop to $25 a barrel
if the global recession extends to China, while the
International Energy Agency cut its forecast for average annual
oil demand growth to 2013 to 1.2 percent from 1.6 percent.
[]
The rapid, steep retracement of oil prices has prompted
many OPEC members to call for increasingly strong action when
the cartel meets on Dec. 17 in Algeria. []
OPEC has already agreed to cut about 2 million barrels per
day (bpd) of production, and although not all members appear to
be contributing their share of the cut-backs kingpin Saudi
Arabia signalled its intent to keep the taps tight.
The world's top exporter told at least one oil refiner in
Asia on Monday that it would maintain supply cuts of 5 percent
below normal contractual volumes in January. []
But 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.
[]
OPEC may need to make a cut of as much as 2 million bpd --
which would be its biggest one-time reduction in over a decade
-- in order to get a rise from a market focused on demand.
"The current downturn in prices has already priced in at
least a 1.5 mln bpd cut," said Emori.
(Reporting by Osamu Tsukimori and Jonathan Leff; Editing by
Ben Tan)
