* U.S. oil futures jump over $1, near $105 after OPEC deal
* OPEC president: decision cuts output 520,000 bpd vs July
* Traders await expected fall in U.S. oil inventories
(Updates prices paras 4-5)
By Angela Moon
SEOUL, Sept 10 (Reuters) - Oil jumped more than $1 to near
$105 a barrel on Wednesday, rebounding from a five-month low
after OPEC agreed a small but unexpected production cut that
some analysts said showed their resolve to keep prices above
$100.
The Organization of the Petroleum Exporting Countries said
it had agreed to revise its complex output targets to a new
limit of 28.8 million barrels per day (bpd), which the cartel's
president said effectively meant reducing supply by about
520,000 bpd versus July over the next 40 days. []
Most analysts had expected the group to maintain formal
targets at its meeting in Vienna, although some had suggested
that its members could tighten compliance to help stem a near
30 percent slump in oil prices since July.
U.S. crude <CLc1> for October delivery surged $1.37 to
$104.63 a barrel as of 0728 GMT, shaking off a brief mid-day
wobble due to continued strength in the U.S. dollar. Prices hit
a five-month low of $101.74 on Tuesday.
London Brent crude <LCOc1> rose $1.56 cents to $101.90,
after falling below $100 on Tuesday for the first time since
April.
"Since the market is over-supplied, the conference agreed
to abide by September 2007 production allocations (adjusted to
include new members Angola and Ecuador and excluding Indonesia
and Iraq), totalling 28.8 million bpd," the group said in a
communique after a nearly five-hour meeting. []
OPEC President Chakib Khelil warned that he still saw
surplus oil supply building on the market by the end of the
year.
Analysts said the group had sent a clear message to the oil
market, which has been battered by a recovery in the U.S.
dollar and a darkening economic outlook that has spurred an
exodus of investment funds from the whole commodities complex.
"It certainly shows that OPEC is not afraid to defend a
$100 price level," said Jonathan Kornafel, Asia director at
U.S.-based options trader Hudson Capital Energy.
The calculations of the new target were complicated by the
inclusion of new members and the removal of Indonesia, which
asked that its membership be suspended. Some analysts
questioned whether the cuts would fully materialise without
details on which countries would be expected to curb supply.
But others said the fact that OPEC chose to make its
decision explicit -- rather than merely agreeing to tighten
compliance with existing limits -- was significant.
"We think this is a serious deal for a real cut... In this
market, direction matters and this is a turn," UBS economist
Jan Stuart said in a report.
Still, the risks to global oil demand posed by high prices
and endangered economic growth loom large, threatening to
undermine a rally that has lifted prices from $20 since 2002.
"I don't think the cut can actually stop the current
downtrend in the oil market," said Susumu Ogasawara, a manager
at Ace Koeki Co Ltd in Tokyo. "The focus will shift back to
falling demand and concerns about the global economy."
The oil cartel, which controls about 40 percent of world
oil production, agreed to meet again in Algeria on Dec 17.
STOCKS, HURRICANES
Traders were seeking direction from U.S. inventory data
later in the day, which was to show a fall in crude stocks by
4.4 million barrels in the week to Sept. 5 after Hurricane
Gustav shut down fields, a Reuters poll of analysts found.
[]
Gasoline stocks were seen falling by 4.2 million barrels
and distillates by 2.7 million barrels.
Hurricane Ike's progress toward the U.S. Gulf of Mexico
kept most oil and natural gas production shut in for a second
week, although its path has recently shifted south and west of
the biggest concentration of production platforms, aiming
instead toward the Texas refining hub of Corpus Christi.
[].
(Writing by Jonathan Leff; Editing by Ramthan Hussain)
