* OPEC cuts January output sharply - Petrologistics
* Cold weather forecast for U.S. Northeast
* European, UK data show economies in recession
(Updates prices)
By Rebekah Kebede and Matthew Robinson
NEW YORK, Jan 23 (Reuters) - Oil prices rose more than 6
percent on Friday as mounting evidence that OPEC is complying
with the bulk of its record output cuts countered gloomy
economic data that further dimmed the outlook for global energy
demand.
U.S. crude <CLc1> settled up $2.80 at $46.47 a barrel,
while London Brent <LCOc1> rose $2.98, to $48.37 a barrel.
The gains came after oil consultant Petrologistics
estimated OPEC production would fall by 1.55 million barrels
per day in January as part of the cartel's efforts to meet a
2.2 million bpd reduction agreed in December. []
"I think this represents anticipation that the OPEC
production cuts are really happening after the Petrologistics
estimates on January OPEC production," said Tim Evans, energy
analyst for Citi Futures Perspective.
Members of the Organization of Petroleum Exporting
Countries are cutting output in reaction to a slide of more
than $100 in oil prices since July as global economic weakness
slams energy demand.
Further support came from forecasts for another cold snap
in the U.S. Midwest and the Northeast -- the world's biggest
heating oil market. Heating oil, which is the primary heating
fuel of the Northeast, was the percentage leader on Friday,
with February front-month heating oil settling more than
percent higher.
"It looked like the strength of heating oil was what was
carrying us higher, I presume because of the cold weather
coming into the northern Plains and into the East Coast this
weekend," said Tom Knight, a trader at Truman Arnold in
Texarkana, Texas.
Oil's gains came as the Reuters-Jefferies CRB index <.CRB>,
a global commodities benchmark, jumped over 2 percent to hit a
near two-week high on Friday. []
"It seems that some of the strength (in oil prices) has
come as part of a wider commodities rally," said Peter Beutel,
president of Cameron Hanover in New Canaan, Connecticut.
U.S. gold futures ended more than 4 percent higher on
Friday, breaking above the $900-an-ounce level on a combination
of safe-haven buying due to currency market volatility and
strong investment demand. []
DIM ECONOMIC OUTLOOK
Oil climbed despite more dismal economic data signaling the
deepening of the global economic downturn.
British data released on Friday confirmed the UK economy
had gone into recession for the first time since 1991, while
Spanish unemployment surged to a nine-year high.
[]
The news added to the crush of bleak economic data coming
out of the United States, the world's biggest oil consumer.
"We continue to believe that weak economic growth is likely
to have a much greater impact on oil demand than is currently
factored into consensus supply and demand forecasts," Deutsche
Bank analyst Adam Sieminski said in a research note.
"We expect OPEC will have to agree to make one more quota
cut at their March meeting, chasing the moving target of oil
demand," Sieminski added.
U.S. government data released on Thursday showed crude and
fuel inventories continued to rise sharply as the recession
stemming from the soured U.S. housing market erodes demand.
But the news about inventories was outweighed by
anticipation for a multibillion-dollar economic stimulus
package from the new Obama administration, which drove prices
higher late Thursday.
(Reporting by Matthew Robinson, Richard Valdmanis, Rebekah
Kebede and Gene Ramos in New York, Maryelle Demongeot in
Singapore and Alex Lawler in London; editing by Jim Marshall)
