* Saudi Arabia has cut supply by 8 pct -OPEC president
* Russia offers OPEC "concrete support"
* U.S. stocks down on economic gloom
(Recasts, updates prices, market activity, analyst comments)
By Matthew Robinson
NEW YORK, Dec 15 (Reuters) - Oil prices fell nearly 4
percent on Monday as deepening economic worries countered
expectations that OPEC would agree to its biggest supply cut
ever when the group meets in Algeria this week.
U.S. crude <CLc1> fell $1.77 to settle at $44.51 a barrel,
off a session high of $50.05. London Brent crude <LCOc1>
settled down $1.81 at $44.60 a barrel.
Dealers said they were eyeing stock market losses amid
worries about the world economy, even as OPEC and top non-OPEC
producer Russia said they likely would agree to slash output.
"We're in a tug of war," said Jim Ritterbusch, president at
Ritterbusch and Associates in Galena, Illinois.
Economic turmoil has slammed energy demand growth and
contributed to a slide in oil prices of more than $100 per
barrel since the peak over $147 in July.
Analysts at Goldman Sachs have said prices could drop as
low as $30 a barrel. OPEC ministers, who meet on Wednesday, are
calling for the largest output cuts ever to combat rising
inventories and sagging demand. []
Russia is sending its highest ranking delegation ever to
the meeting in Algeria -- including heads of its five top oil
companies -- in another sign the world's top non-OPEC producer
is willing to clinch a deal to protect oil prices. []
Oil dropped to a four-year low of $40.50 a barrel on Dec. 5
as the slumping global economy depresses demand in large
consumer nations such as the United States.
"The market is still fixated on the loss of demand and the
thought that if OPEC is successful in raising prices via a big
cut in production, demand may be impacted even further," said
Dominick Chirichella, senior partner AT Energy Management
Institute at Point Pleasant, New Jersey.
Saudi Arabia, OPEC's most influential member, identified
$75 a barrel as a "fair" price for crude in November, while
Iran's oil minister said over the weekend that the "real price"
of oil should be more than $100 a barrel. []
After slashing a combined two million barrels daily, 7.3
percent of its output at two previous meetings, OPEC was
expected to chop production by at least another 5 percent to
help draw down global inventories.
"We think should OPEC go for anything less than 2 million
barrels a day, participants would be inclined to use this as a
selling opportunity," said Edward Meir of MF Global in a
research note.
"The cartel is simply too far behind the curve to consider
anything less than that."
OPEC President Chakib Khelil said the amount of crude oil
stored on tankers around the world by oil producers and
international companies may have swelled to the equivalent of
one full day's worth of global output as the economy slows.
[]
"Everybody is supporting a cut -- I don't have any doubt
about it. The Saudis have already taken a decision ahead of the
meeting, as you know, they have reduced their supply to the
market by 8 percent, which has had an affect on the market,"
Khelil told reporters. []
In China, the world's second biggest energy consumer,
implied oil demand shrank by about 3.5 percent in November from
the year before, the first decline in nearly three years,
Reuters calculations showed. []
(Additional reporting by Robert Gibbons in New York; Jane
Merriman in London; Maryelle Demongeot in Singapore and Osamu
Tsukimori in Tokyo; Editing by David Gregorio)
