* U.S. oil data on Wednesday likely to show crude stocks up
* Dollar falls against basket of currencies
* U.S., Japanese stocks drop
* OPEC may call emergency meeting if oil prices keep falling
(Updates throughout, changes dateline, pvs PERTH)
By Christopher Johnson
LONDON, Dec 24 (Reuters) - Oil held steady around $39 a
barrel on Wednesday supported by a weaker dollar and talk by
OPEC of a possible emergency meeting if prices keep dropping.
Sharp falls in the world's stock markets and worries that
deep global recession will slash global energy demand kept oil
prices near 4-1/2-year lows ahead of the Christmas and New Year
holidays.
U.S. light crude for February delivery <CLc1> edged down 2
cents to $38.96 a barrel by 0905 GMT, after climbing to a high
of $39.69. The contract fell 93 cents, or 2.3 percent, to settle
at $38.98 a barrel on Tuesday.
London Brent crude <LCOc1> fell 21 cents to $40.15 a barrel.
Stock markets again set a bearish trend with the Dow Jones
industrial average <> closing down 1.2 percent and Japanese
equities following suit after a raft of negative economic data.
[] [].
"Oil prices continue to fall on the coat tails of equity
markets and the trend suggests this will continue into the New
Year," said Rob Laughlin, senior oil analyst at MF Global.
Oil prices have fallen about 60 percent since the start of
this year and tumbled more than 70 percent since their record
peak above $147 in July as demand from the United States, China,
Japan and other industrialised nations has fallen.
The Organization of the Petroleum Exporting Countries (OPEC)
has already announced cuts of 5 percent in global oil supplies
and may call an emergency meeting before March if prices extend
their near $110-per-barrel slide since summer, OPEC's President
Chakib Khelil said on Tuesday. []
"We will review the market again and make a proper decision
if we see that prices still continue sliding despite the
compliance," Khelil told Reuters.
Oil was buoyed on Wednesday by a dip in the dollar, which
edged down against the yen, pressured by light selling from
Japanese exporters after dismal U.S. growth and housing data
suggested a prolonged recession ahead.
The euro also rose versus the dollar on cooling expectations
for a euro zone interest rate cut in January. []
But forecasts that U.S. government data would show a build
in crude stocks for the third-straight week by 400,000 barrels
weighed on prices. []
Data due later on Wednesday is also expected to show
distillate stocks rose 200,000 barrels last week, while gasoline
is seen up 500,000 barrels, a Reuters poll showed.
U.S. government data on Tuesday showed the world's largest
economy shrank 0.5 percent in the third quarter as a credit and
housing crisis took hold. Consumer spending plunged 3.8 percent,
the deepest fall since 1980. []
The UK economy shrank 0.6 percent in the third quarter, its
first decline since the early 1990s, and data also showed
recessions taking root in Spain and New Zealand. []
The U.S. Energy Information Administration expects world oil
demand to shrink in 2008 and 2009 due to the financial turmoil,
marking the first declines since 1983.
But OPEC Secretary-General Abdullah al-Badri sounded an
optimistic note in remarks published in the pan-Arab al-Hayat
newspaper on Wednesday, saying oil prices would recover in the
second half of 2009 and were likely to reach $75 a barrel in
early 2010.
Badri said he expected OPEC producers to adhere to supply
cuts agreed by the group despite doubts in the market about
compliance. []
(Additional reporting by Fayen Wong in Perth; editing by
Anthony Barker)
