* Weekly U.S. oil stocks data forecast to show crude rises
* European shares fall in early trade, dragged down by oils
* China cuts interest rates by 1.08 percent
(Recasts, updates prices, adds details, previous SINGAPORE)
By David Sheppard
LONDON, Nov 26 (Reuters) - Oil rose above $51 a barrel on
Wednesday from a near 7 percent decline in the previous session,
ahead of weekly U.S. oil stocks data that will help investors
gauge the strength of demand in the world's top energy consumer.
U.S. light crude for January delivery <CLc1> rose 78 cents
to $51.55 a barrel by 1000 GMT, having settled down $3.73 at
$50.77 on Tuesday after two-day gains of nearly 10 percent.
London Brent crude <LCOc1> rose 96 cents to $51.31 a barrel.
Oil prices have failed to post three consecutive days of
gains since September.
Weaker than expected U.S. GDP data knocked down prices on
Tuesday, after a government revision showed third-quarter gross
domestic product shrank by 0.5 percent rather than the 0.3
percent reported last month.
China's decision to cut interest rates by 1.08 percent on
Wednesday has boosted hopes that a prolonged slowdown in the
world's fastest growing oil consumer can be avoided, providing
some support for prices.
"Any positive news for China could be good for oil demand,"
said Sucden analyst Michael Davies. "It's quite clear the
Chinese economy has issues but they appear to be taking action
to help avoid a hard landing."
The slowing global economy has hit oil demand hard, with
many analysts predicting demand growth next year could be flat
or even fall for the first time since the early 1980s.
Prices have plummeted by almost $100 a barrel since hitting
a peak above $147 a barrel back in July.
EVENLY BALANCED
Ministers from the Organization of Petroleum Exporting
Countries (OPEC) meet in Cairo on Friday for a consultative
session amid calls for further production cuts from members to
help balance the oil market.
OPEC members Iran and Venezuela have called on the group to
cut production by at least another 1 million barrels per day,
after last month's 1.5 million bpd cut failed to lift prices.
OPEC's next official production-setting meeting is in
Algeria on Dec. 17. OPEC pumps 40 percent of the world's oil.
"The bullish and bearish influences are pretty evenly
balanced at the moment with speculation of a further OPEC
production cut largely offset by the ongoing concerns over
falling demand," said Bank of Ireland analyst Paul Harris.
"After the volatility we've seen in the market over the last
two sessions it will probably quieten down about ahead of the
U.S. inventory data later today."
U.S. fuel stock data due for release at 1535 GMT is expected
to show another rise in U.S. crude and gasoline stocks,
providing further evidence of slowing demand. []
Analysts polled by Reuters project a rise of 800,000 barrels
in crude supplies, a 400,000 barrel increase in gasoline stocks
and an 800,000 barrel fall in distillate inventories including
heating oil, as cold weather hits the U.S. Northeast market.
(Additional reporting by Maryelle Demongeot in Singapore;
Editing by James Jukwey)
