* U.S. Congress nears bailout deal
* U.S. demand, Japan crude imports fall
* IEA says no need to release emergency supplies
(Updates prices)
By Jane Merriman and Joe Brock
LONDON, Sept 25 (Reuters) - Oil fell on Thursday but moved
up from session lows in response to hopes of agreement on a
proposed U.S. $700 billion financial sector bailout plan.
Prices had fallen more than $2 initially, pressured by
further evidence of U.S. economic weakness that has begun to
affect demand for oil.
U.S. crude <CLc1> traded down 48 cents at $105.25 a barrel
by 1511 GMT, after a session low of $103.22. London Brent crude
<LCOc1> fell 77 cents to $101.68.
President George W. Bush called an emergency meeting to
hammer out details of the plan to rescue the financial services
sector. []
U.S. shares rose and the U.S. dollar rebounded against the
yen as U.S. Congress moved towards agreement on the financial
sector rescue proposal.
But even if the bailout goes ahead, investors remain unsure
whether it will prevent the U.S. economy from slowing further.
"The U.S. may be closer to reaching a deal to approve the
bailout but there is still a lot of uncertainty on its overall
impact on the economy," said Mark Pervan, an analyst at
Australia and New Zealand Bank.
A profit warning from U.S. company General Electric and weak
U.S. economic data highlighted the fragility of the U.S.
economy. Orders for costly U.S. manufactured goods plunged in
August and the number of workers filing new claims for jobless
benefits shot up last week. []
ECONOMIC WEAKNESS
"Until the bailout proposal becomes law, investors will
remain reluctant to take big positions in a number of commodity
complexes," said Edward Meir, analyst at MF Global, in a report.
Economic weakness has already hit oil demand in the United
States, the world's biggest energy consumer, and in other
developed economies.
This has contributed to a fall in oil prices from a peak of
$147.27 struck in July.
A U.S. government report released on Wednesday showed demand
in the top oil consuming nation over the past four weeks running
5.3 percent below last year, hit by high fuel costs and the
wider economic crisis.
Crude oil imports by No. 3 consumer Japan fell 3.3 percent
to 4.13 million barrels per day in August from the same month
last year, government data showed on Thursday. []
"Demand could be a factor but I think macro concerns are
really what's moving prices," said Helen Henton, head of
commodities research at Standard Chartered.
Analysts said slow recovery in oil and gas production in the
U.S. Gulf of Mexico from Hurricane Ike, falling U.S. inventories
and lower OPEC supplies would offer support for prices.
U.S. gasoline inventories, for example, are at their lowest
since 1967.
But the International Energy Agency sees no need to release
emergency supplies. "We don't have to mobilize," IEA Executive
Director Nobuo Tanaka said. "The market is now taking care of
the current situation."
(Additional reporting by Alex Lawler in London and Fayen Wong
in Perth; editing by Anthony Barker)
