UPDATE 5-Oil up on OPEC output cut; IEA lowers demand forecast

                                
 * Oil rises after OPEC's surprise decision to cut output
                                
 * IEA cuts 2008, 2009 global oil demand growth forecasts
                                
 * U.S. data to show sharp falls in crude, fuel stocks
                                
 
 (Previous Seoul, recasts, update prices)
                                
 LONDON, Sept 10 (Reuters) - Oil rose on Wednesday following
a surprise decision by OPEC to cut production, after slowing
demand from the United States and other large consumers sent
prices down 30 percent over the past two months.
                                
 The Organization of the Petroleum Exporting Countries (OPEC)
said it had agreed to revise its output targets to 28.8 million
barrels per day (bpd), which the group's president said
effectively meant reducing supply by about 520,000 bpd versus
July over the next 40 days. [ID:nLA555829]
                                
 "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. [ID:nLA702107]
                                
 Most analysts had expected the group to maintain formal
targets.
                                
 U.S. crude <CLc1> rose 68 cents to $103.94 a barrel by 0917
GMT. On Tuesday, it fell to as low as $101.74, the cheapest
price in five months.
                                
 London Brent crude <LCOc1> rose 77 cents to $101.11, after
falling below $100 on Tuesday for the first time since April.
                                
 "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.
                                
 However, the gains in prices were limited as the
International Energy Agency (IEA) lowered its 2008 world oil
demand growth forecast by 100,000 bpd due to the impact of
weaker economic conditions and high prices in its monthly oil
market report. [IEA/M]
                                
 The IEA, adviser to 27 industrialised countries on energy
policy, also trimmed its forecast for 2009 global demand growth
by 40,000 bpd to 890,000 bpd.
                                
 Traders would shift their focus to the U.S. weekly oil
statistics due out later on Wednesday for market direction.
[EIA/S]
                                
 Analysts in a Reuters poll expect U.S. government oil
inventory data to show a sharp fall in crude oil and refined
product stocks due to production and import disruptions caused
by Hurricane Gustav.
                                
 Crude oil stocks in the United States were seen falling 4.4
million barrels in the week to Sept. 5. Gasoline stocks were
seen down 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.
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. [ID:nN09502555].
 (Reporting by Ikuko Kao, Angela Moon in Seoul and Jonathan Leff
in Singapore; Editing by Michael Urquhart)