* Eyes on U.S. Energy Dept's short-term outlook
* Expectations of more output cuts by OPEC next week
(Updates throughout, changes dateline, pvs SINGAPORE)
By Christopher Johnson
LONDON, Dec 9 (Reuters) - Oil steadied below $44 on Tuesday
as the market awaited a report from the U.S. Energy Department
for clues on the state of demand in the world's biggest consumer
and looked ahead to next week's OPEC meeting.
Crude broke six straight sessions of losses on Monday,
jumping 7 percent with a rally in equity markets and after signs
key supplier Saudi Arabia would cut supplies to customers.
The Organization of the Petroleum Exporting Countries meets
on Dec. 17 in Algeria and is widely expected to reduce overall
production by 1-1.5 million barrels per day (bpd) as it steps up
efforts to halt the steep slide in prices.
U.S. crude for January delivery <CLc1> was up 2 cents at
$43.73 a barrel at 0920 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> rose 10 cents to $43.52 a barrel.
"Oil is on a countdown to OPEC now and everyone is expecting
them to come up with something big -- probably a cut of 1-1.5
million bpd," said Rob Laughlin, senior oil analyst at brokers
MF Global in London.
"If OPEC doesn't make a big cut, this market is in trouble."
Stock markets surged 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
"Big Three" automakers with $15 billion of loans.
[]
RELIEF
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.
European stocks were lower in early trade, led down by
financials and utilities.
Oil traders were awaiting the release later on Tuesday of
the U.S. Energy Department's Short Term Energy Outlook, which
was expected to show downgrades in 2009 oil demand estimates.
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.
Demand for oil appears to be falling across the rich,
developed economies but analysts expect producers to act to stem
the collapse in the oil market that has seen prices lose two
thirds of their value from a peak above $147 a barrel in July.
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. []
OPEC has already agreed to cut about 2 million bpd of
production to support prices, and members are leaning towards
more supply cuts. []
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.
[]
But the downward trend for oil prices remains very much
intact, SG Commodities Research said 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."
(Additional reporting by Jennifer Tan in Singapore; editing by
Sue Thomas)
