* Saudi Arabia says has taken 1.7 mln bpd off market
* U.S. crude inventories expected to rise
* EIA, others, may keep cutting oil demand forecast
(Recasts with new detail, prices throughout)
By Christopher Johnson
LONDON, Jan 13 (Reuters) - Oil jumped almost $2 to above $39
a barrel on Tuesday after Saudi Arabia said it had removed 1.7
million barrels per day (bpd) of oil from the world market since
last summer.
U.S. crude oil futures for February <CLc1> rose to a high of
$39.50, up $1.91, before easing back slightly. By 1600 GMT, the
contract was at $38.44.
February Brent <LCOc1> jumped to a high of $45.59, up $2.68.
The moves followed comments by Saudi Arabian Oil Minister
Ali al-Naimi that the kingdom would pump below its OPEC
production target of 8.05 million bpd in February.
"If there is a need to do more, we will do so because our
purpose is to bring things in balance," Naimi told reporters in
New Delhi. "We will look and see whether we need to take more.
If we need to, if inventories keep rising, we will reduce."
"We have taken -- Saudi Arabia alone -- 1.7 million (bpd)"
(off the market), he said.
Dealers said the market was also supported by a blast of
cold winter weather in the northern hemisphere and improved
crack spreads boosting refined products.
"The Saudis are working pretty hard to get this market up
and trying to get the other OPEC members to cut output as well.
There is no doubt about it -- $40 crude is not very good for
them," said a trader at a large London brokerage.
"It is still quite cold so that is also probably having an
impact on the market," he added.
BULGING U.S. INVENTORIES
The Saudi comments helped turn around a market that had
looked very bearish ahead of what many analysts expect will be
data on Wednesday showing further builds in U.S. oil stocks.
A Reuters poll ahead of Wednesday's U.S. inventory report
forecast crude stocks rose by 2.2 million barrels last week, the
third weekly gain. []
Three major forecasters are scheduled this week to update
their outlooks for world oil demand as the global economic
slowdown bites, and some analysts expect the reports may lower
demand forecasts for 2009 further.
The spread between Brent and U.S. crude has widened sharply
as high inventory levels pressure the U.S. benchmark. Stock
levels at Cushing, Oklahoma, the delivery point for U.S. crude
futures, are at record levels.
Slumping fuel demand due to the global slowdown sent oil
prices down 54 percent last year, and crude is now off more than
$110 from its record high of $147.27 a barrel last July.
The global economic situation is worsening and new forecasts
to be released shortly from the International Monetary Fund will
not be optimistic on the outlook, IMF Managing Director
Dominique Strauss-Kahn said.
(Additional reporting by David Sheppard in London, Fayen Wong
in Perth and Chua Baizhen in Singapore; editing by James Jukwey)
