UPDATE 1-Oil steadies below $44 after 7 pct rally overnight

                                
 * Wall Street's bounce boosts market sentiment
                                
 * Eyes on U.S. Energy Dept's short-term outlook later Tues
                                
 * Expectations of more cuts at OPEC decision next week
 (Updates with prices, quote, background)
                                
 By Jennifer Tan
                                
 SINGAPORE, Dec 9 (Reuters) - Oil was little changed below
$44 on Tuesday after a 7 percent jump the previous day, with
the market watching for the U.S. Energy Department's short-term
outlook that could point to more oil demand weakness next year.
                                
 Crude broke six straight session of losses on Monday,
fuelled by a jump in equity markets and signs of deepening cuts
from key supplier Saudi Arabia ahead of next week's OPEC
meeting, but further signs of demand destruction could pull
back prices.
                                
 The Dec. 17 OPEC meeting, which is expected to agree more
output cuts to help keep oil away from the four-year low it hit
last week, will also be closely eyed.
                                
 U.S. crude for January delivery <CLc1> was down 6 cents at
$43.65 a barrel at 0600 GMT, after surging $2.90 to settle at
$43.71 a barrel overnight -- a rebound from a 25 percent drop
last week that was the biggest weekly fall in 18 years.
                                
 London Brent crude <LCOc1> fell 22 cents to $43.20 a
barrel.
                                
 "There's some buying interest on the positive news flow
coming out of the U.S. -- it's a relief rally," said Mark
Pervan, senior commodities strategist at ANZ Investment Bank.
                                
 "But it could prove to be short-lived -- we're going to see
more negative economic data that will probably push prices
lower."
                                
 Global stocks surged higher on Monday as the U.S.
government cobbled together a rescue plan for stricken
automakers and U.S. President-elect Barack Obama said he would
undertake the biggest infrastructure spending since the 1950s.
                                
 The White House reviewed a Democratic plan to bail out the
the "Big Three" automakers with $15 billion of loans.
[ID:nN07466561]
                                
 The rescue plan could offer some relief to investors
stunned by the loss of half a million jobs in November, which
heightened fears that the U.S. economic downturn was deepening.
                                
 Asian stocks edged up on Tuesday to a one-month high, but
gains were capped as hopes for government spending plans to
revive economic growth were offset by investors wary of
increasing their risk exposure ahead of the year-end.
                                
 SHORT-TERM SUPPORT
                                
 Oil also got a boost from prospects for a fresh OPEC
agreement to cut output when the producer cartel meets on Dec.
17.
                                
 OPEC kingpin Saudi Arabia, which has cited $75 a barrel as
a "fair price" for oil, will make bigger supply cuts to some of
its Asian and European customers next month, as it steps up
efforts to halt the steep slide in prices. [ID:nT347752]
                                
 OPEC, facing a tumble in oil prices since July of over $100
a barrel, has already agreed to cut about 2 million barrels per
day (bpd) of production to support prices, and members are
leaning towards more supply cuts. [ID:nL3531815]
                                
 "What might hold prices up over the short term is the OPEC
decision next Wednesday," Pervan added.
                                
 "We could see some mild buying interest ahead of the
meeting."
                                
 The producer cartel will fight hard to keep oil prices from
falling below the "flashpoint" level of $40 a barrel, an
official with U.S. fund manager BlackRock said on Monday.
[ID:nN08298667]
                                
 But the downward trend for oil prices remains very much
intact, said SG Commodities Research in a weekly note.
                                
 "$40 a barrel could be difficult to break, but we expect
WTI to go lower in the coming months. GDP, oil demand weakness
and the crude overhang are much clearer than OPEC cuts so far,"
it added.
                                
 The release of the U.S. Energy Department's Short Term
Energy Outlook later on Tuesday is expected to reveal further
downgrades of 2009 oil demand estimates, which could also weigh
on prices, analysts said.
                                
 In a forecast issued last month, the Energy Department said
total U.S. oil demand was projected to fall by an additional
250,000 bpd, or 1.3 percent next year, after tumbling 1.1
million bpd, or 5.4 percent, in 2008.
 (Editing by Michael Urquhart)
 (jennifer.tan@thomsonreuters.com; +65-6417 4679; Reuters
Messaging: jennifer.tan.reuters.com@reuters.net)