* U.S. crude inventories expected to rise
* EIA cuts oil demand forecast for 2009
* EU says countries receiving little Russian gas despite
restart
(Updates with Brent settlement price)
By Rebekah Kebede
NEW YORK, Jan 13 (Reuters) - Oil prices settled higher on
Tuesday, bolstered by cold weather in the United States and
comments by OPEC member Saudi Arabia that it had made deep
production cuts.
The news offset a report by the U.S. Energy Information
Administration further revising down its forecast for 2009
global oil demand. []
U.S. crude <CLc1> settled at $37.78 a barrel, up 19 cents,
off a session high of $39.50. February Brent <LCOc1> settled at
$44.83, up $1.92.
"This is a product-led rally, with heating rallying on cold
weather and gasoline up with the crack spread up dramatically.
News that the Saudis have cut production a lot is also
supportive," said Andrew Lebow, broker at MF Global.
Saudi Arabian Oil Minister Ali al-Naimi said the world's
biggest exporter 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.
OPEC's secretary general said the cartel may cut oil output
further at its meeting in March if the market remains
oversupplied a month from now. []
OPEC agreed to cut supply by 2 million bpd at meetings in
in September and October. In December, it agreed to lower
output by a further 2.2 million bpd as of Jan. 1, a record
reduction.
Support also came from a blast of cold winter weather in
the northern hemisphere, which pushed up heating oil futures.
The global economic crisis has dented global energy demand
and helped send crude prices tumbling from record highs over
$147 a barrel hit in July.
Earlier in the day, oil prices turned negative as demand
concerns overshadowed the U.S. cold front and Saudi Arabia's
cuts.
The EIA revised down its 2009 world oil demand forecast by
200,000 barrels per day (bpd) on Tuesday, calling for
consumption to fall by a total of 810,000 bpd this year
compared with 2008 levels.
"The demand was revised downward, but (the) decline in
global demand for 2009 looks rather small when measured against
a 4.2 million barrels per day drop in OPEC quotas," said Tim
Evans.
U.S. crude oil stocks have swelled as demand in the top oil
consumer wilts, pushing U.S. crude futures into a deep discount
compared with Brent crude.
Stock levels at Cushing, Oklahoma, the delivery point for
U.S. crude futures, have hit record levels and analysts expect
inventories could rise further.
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. []
Russia started pumping gas meant for Europe via Ukraine on
Tuesday for the first time in nearly a week, but the European
Union said little or no gas was flowing to countries suffering
urgent energy shortages. []
(Additional reporting by Gene Ramos and Robert Gibbons in New
York; Christopher Johnson and David Sheppard in London, Fayen
Wong in Perth and Chua Baizhen in Singapore; editing by Jim
Marshall)
