* IEA sees oil supply crunch as demand rises from 2010
* Japan economy shrinks most since 1974
* South Korean exports fall by a third
* President Obama to sign stimulus bill on Tuesday
(Updates throughout)
By Christopher Johnson
LONDON, Feb 16 (Reuters) - U.S. oil prices climbed above $38
a barrel on Monday after the International Energy Agency (IEA)
said there could be an oil market supply crunch from next year
once global oil demand begins to recover.
The IEA warning gave upward momentum to a market undermined
by a raft of bearish economic data from Asia.
Japan's economy shrank in the last quarter by its most since
the first oil crisis in 1974, hit by an unprecedented slump in
exports, which is likely to lead to more calls for extra
stimulus steps to fight the deepening recession.[]
The impact of the recession is also being felt in South
Korea, where January exports dropped by a record 33.8 percent
from a year earlier, even worse than forecast. []
U.S. light crude oil futures for March delivery <CLc1> were
up 65 cents at $38.16 a barrel by 1004 GMT in electronic trade,
after gaining $3.53 on Friday. The New York Mercantile Exchange
is closed for Presidents Day and will reopen on Tuesday.
London Brent crude <LCOc1> for April rose 29 cents to
$45.10, maintaining a premium to U.S. oil due to high stock
levels at the main U.S. storage hub in Cushing, Oklahoma.
The IEA's executive director, Nobuo Tanaka, told reporters
on the sidelines of a conference in London he expected world oil
demand to resume growth from next year, rising by about 1
million barrels per day (bpd) in 2010.
SUPPLY CRUNCH
"Currently the demand is very low due to the very bad
economic situation but when the economy starts growing, recovery
comes again in 2010 and then onward, we may have another serious
supply crunch if capital investment is not coming," Tanaka said.
Analysts see most oil prices trapped within a fairly tight
trading range for the time being.
"We continue to maintain that crude prices will be trapped
in a sideways band for the next several weeks," brokers MF
Global said in a note to clients. "Rallies above $50 look
vulnerable, as given the deteriorating global macro backdrop, we
do not think prices north of that level will be sustainable."
Oil's jump on Friday was largely boosted by renewed optimism
that a giant U.S. stimulus package could help pull the economy
out of a 14-month recession, while the gains were further
encouraged as traders booked profits by selling the spread
between front and second month futures contracts.
U.S. President Barack Obama on Saturday hailed congressional
approval of the $787 billion economic stimulus bill as a major
milestone in the country's economic recovery and the White House
said he would sign the legislation on Tuesday.
Obama's aides warned Americans on Sunday not to expect
instant miracles from the $787 billion economic stimulus bill he
will sign this week, but said it would help eventually.
Oil prices have tumbled from their peak above $147 a barrel
last year, as the economic downturn has spread to all regions of
the world, cutting energy consumption.
Analysts see downside risks for oil, as economies struggle
through their worst recession in decades.
World oil demand will contract more sharply than expected
this year due to the economic crisis, OPEC said on Friday, an
outlook that may bolster the case for further supply cuts when
the group next meets in March.
U.S. economic data due to be released on Tuesday include
manufacturing production in New York State and U.S. home builder
sentiment for February.
(Additional reporting by Fayen Wong in Perth; editing by
Anthony Barker)
