* Oil rebounds after Australia cuts interest rates
* U.S. cuts world oil demand growth forecast
* Some OPEC members are worried by oil price fall
(Adds U.S. demand forecast, updates prices)
By Alex Lawler
LONDON, Oct 7 (Reuters) - Oil rose more than $5 a barrel on
Tuesday after a big interest rate cut in Australia raised hopes
that other countries would follow suit to bolster economic
growth, a move that would support oil demand.
The market spiked further after a report that a U.S.
warplane violated Iran's territory and was forced to land in
Iran.
U.S. crude <CLc1> was up $5 at $92.81 a barrel at 1313
GMT. It settled down $6.07 at $87.81 on Monday after hitting an
eight-month low of $87.56.
London Brent <LCOc1> rose $4.00 to $87.99 a barrel.
Oil had fallen by $6 on Monday as part of an international
market rout, triggered by the credit crisis.
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."
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. []
Investors expect the Bank of England to cut rates at its
policy meeting this week and are also pricing in cuts soon from
the U.S. Federal Reserve and the European Central Bank.
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.
The U.S. Energy Information Administration revised down its
forecast for world oil demand growth in 2009 versus 2008.
The agency cut its forecast by 140,000 barrels per day from
its previous estimate published last month. []
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.
"If this volatility continues, OPEC will have to do
something," Shokri Ghanem, chairman of Libya's National Oil
Corporation, told Reuters by telephone.
"We may sit down together before December," he said. OPEC's
next meeting is in December in Algeria.
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. []
(Additional reporting by Annika Breidthardt in Singapore;
editing by James Jukwey)
