* Oil rises after slide to 13-month low, but off highs
* Euro zone leaders agree to bank support measures
* Goldman Sachs slashes forecasts, turns near-term bear
(Updates prices)
By Fayen Wong
PERTH, Oct 13 (Reuters) - Oil climbed more than $2 on
Monday, recouping part of Friday's 10 percent dive as European
leaders took bolder steps to pull the banking sector out of
crisis, but some gains faded as traders curbed their initial
enthusiasm.
Countries from Europe to Australia rushed out plans on
Sunday to shore up their banks, trying to stem a crash in
markets, while investment bank Goldman Sachs said the financial
crisis had already done more damage than it expected to
commodity demand, forcing it to dramatically cut price targets.
U.S crude <CLc1> for November delivery rose $2.03 to $79.73
a barrel by 0343 GMT, paring earlier gains to a peak above $81
a barrel as the initial flush of enthusiasm over the latest
efforts to stave off a global recession lost some lustre.
Prices plunged nearly $9 on Friday to their lowest since
Sept. 10, 2007, having dumped 17 percent over last week, the
biggest one-week loss since the 2003 war in Iraq.
London Brent crude <LCOc1> rose $1.91 to $76.00 a barrel.
"The announcements from over the weekend would have some
positive effects on the markets, even though it's still in very
early days at this stage to say if they would put an end to the
financial crisis," said David Moore, a commodities analyst at
the Commonwealth Bank of Australia.
In Europe, government leaders agreed on commitments to
provide capital for banks caught short of funds because of
frozen money markets and to insure or buy into new debt issues,
the latest in a series of bold measures. []
The U.S. Federal Reserve will consider all options in
seeking to stabilise credit markets in a period that may bring
negative growth, Dallas Fed President Richard Fisher said.
[]
The news lifted U.S. stock futures on Sunday evening after
they had plunged more than 18 percent last week in their
worst-ever weekly fall as panicked investors dumped stocks on
fears the economy was headed irreversibly into recession.
Slumping demand in the United States and other developed
economies have sent oil prices off their July peak of above
$147 a barrel, reached after surging consumption in emerging
markets such as China sent commodities on a six-year rally.
GOLDMAN TURNS NEAR-TERM BEAR
Goldman Sachs, once one of the foremost bulls on
commodities, turned a near-term bear on Monday after conceding
that global financial turmoil would take a far bigger toll on
demand, warning that $50 oil was possible if the crisis
deepened.
"We have underestimated the depth and duration of the
global financial crisis and its implications on economic growth
and commodity demand," its commodity markets research team
said.
The bank cut its year-end U.S. crude oil target to $70 a
barrel, down from a previous forecast of $115 a barrel, and
slashed its average 2009 forecast by a third to $86 a barrel.
The price fall has caused some OPEC members to call for a
cut in production levels, and the cartel has agreed to hold an
emergency meeting in Vienna on Nov. 18 to discuss the impact of
the global financial crisis on the oil market.
Iran is set to push for a cut in oil output at an OPEC
emergency meeting in November, its oil minister said in
comments published on Sunday, adding investment conditions in
the oil industry would be severely hit unless OPEC acted
decisively to arrest the current fall in oil prices.
[]
But Saudi Arabia, the world's biggest exporter and OPEC's
most influential member, has shown no signs of taking
pre-emptive action to stem the slide in prices, telling major
Asian refiners that it will maintain crude oil shipments
unchanged next month, according to notices sent to refiners.
[]
(Reporting by Fayen Wong; Editing by Michael Urquhart)
