* OPEC may cut output again
* U.S. shares pare early gains
* U.S. crude inventories, evidence awaited of OPEC cut
(Updates prices, recasts, changes dateline from LONDON)
By Chris Baldwin
NEW YORK, Oct 28 (Reuters) - Oil steadied over $63 a barrel
on Tuesday as concerns about the global economy offset OPEC
comments the producer group could throttle back on output again
to support prices.
Oil found support early on evidence OPEC would act upon
last week's decision to cut production as the United Arab
Emirates state oil company reduced volumes to term customers.
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OPEC ministers will take further steps to prop up the oil
market and could call another meeting before the group's next
scheduled talks in December, officials said on Tuesday.
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U.S. light crude for December delivery <CLc1> fell 5 cents
to $63.17 by 1:00 p.m. EDT (1700 GMT), after earlier touching a
session high of $65.20.
London Brent crude <LCOc1> traded down 33 cents to $61.08.
Stocks rose on Tuesday but pared early gains, led by the
downtrodden technology and energy sectors, a day after a late
slide sent U.S. shares to their lowest levels in 5-1/2 years.
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"Crude has yet to find an independent course of direction
as it continues to track very closely the equity and currency
markets," said Nauman Barakat, senior vice president at
Macquarie Futures USA.
The credit crisis that began with failing U.S. mortgages
has widened into a worldwide rout with investors dumping stocks
and commodities, shunning higher-risk emerging markets and
seeking out the safest government bonds and currencies.
U.S. consumer confidence plunged to record low in October
as the economy appeared to be sliding into a deep recession,
threatening to pull the rest of the world along with it.
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Global economic turmoil has already had a major impact on
fuel consumption, with some analysts predicting $50 a barrel --
roughly seen as the cash cost of production for many newer oil
projects -- is possible in the short term.
U.S. crude has already dropped by nearly 60 percent from
its record above $147 a barrel in July to a low of $61.30 on
Monday, the weakest in 17 months.
OPEC's announcement last week it would cut output by 1.5
million barrels per day initially did little to stem oil's fall
as the market was sceptical the group would really reduce
supplies.
On Tuesday, the United Arab Emirates Abu Dhabi National Oil
Co (ADNOC) notified its customers it was cutting contracted
volumes for some crude by 5 percent, in line with last week's
OPEC deal.
For the next indication of the balance of supply and
demand, traders were looking ahead to U.S. fuel stocks data to
be released on Wednesday.
Crude inventories were expected to have risen for the fifth
week in a row last week following higher imports, a preliminary
Reuters poll of eight industry analysts showed. []
(Additional reporting by Joe Bock and Barbara Lewis in London;
Editing by Christian Wiessner)
