UPDATE 4-Oil rises to $91 after steep slide

                                
 * Oil rebounds after Australia cuts interest rates
                                
 * Credit crisis still feared hitting demand
                                
 * Some OPEC members are worried by oil price fall
                                
 
                                
 (Updates prices)
                                
 By Alex Lawler
                                
 LONDON, Oct 7 (Reuters) - Oil rose by $3 a barrel on Tuesday
after a large interest rate cut in Australia raised hopes that
other policymakers would follow suit to bolster economic growth,
a move that would support oil demand.
                                
 The gain recouped some of the losses on Monday, when oil
fell by $6 as part of an international market rout, and European
equities also moved higher after. But oil traders were sceptical
the rally would last.
                                
 "It's a bit of a recovery, but hardly anything to speak of
after very steep falls," said Christopher Bellew, a broker at
Bache Commodities.
                                
 "It would be foolish to think the dawn has come in terms of
oil prices going back up again."
                                
 U.S. crude <CLc1> was up $3.22 at $91.03 a barrel at 1145
GMT. It settled down $6.07 at $87.81 on Monday after hitting an
eight-month low of $87.56.
                                
 London Brent <LCOc1> rose $2.42 to $86.10 a barrel.
                                
 Australia's central bank surprised the market with its
biggest interest rate cut in 16 years on Tuesday, a 1 percentage
point reduction in the Reserve Bank of Australia's benchmark
cash rate. [nSP375711]
                                
 Investors expect the Bank of England to cut rates at its
policy meeting this week and are pricing in cuts from the U.S.
Federal Reserve and the European Central Bank in the near
future.
                                
 Even so, analysts said concern remained about the economic
outlook and the weakening prospects for oil demand.
                                
 "People are still very worried about the outlook for the
international economy," said David Moore of the
Commonwealth Bank of Australia.
                                
 Oil has plummeted from a record high of $147.27 a barrel hit
in July as high fuel prices and the growing financial crisis
slow oil demand in top consumer the United States and other
industrialised nations.
                                
 Analysts are watching oil demand from China -- which helped
drive oil's rally from $20 in early 2002 -- for signs the crisis
is hitting consumption in the world's second-largest consumer.
                                
 Oil's drop has caused worry for some members of the
Organization of the Petroleum Exporting Countries. An Iranian
official said on Tuesday Tehran was concerned about demand as
the global financial crisis deepens. [nL7726669]
                                
 News that Mexico's state-owned oil company Pemex was
evacuating four offshore oil platforms due to tropical storm
Marco could become supportive for prices. [ID:nN06420301]
 (Additional reporting by Annika Breidthardt in Singapore;
editing by James Jukwey)