* Brent crude edges higher
* OPEC cut in Cairo uncertain
(Adds comment, updates prices)
By Jane Merriman
LONDON, Nov 28 (Reuters) - Oil edged towards $54 a barrel on
Friday, drawing modest support from the possibility that OPEC
ministers gathered in Cairo could decide on a third output cut
to bolster the market.
London Brent crude <LCOc1> was 58 cents up at $53.71. Brent
looks more representative of market sentiment than U.S. crude as
trading in the United States is still subdued because of the
Thanksgiving holiday weekend.
U.S. light crude for January delivery <CLc1> stood 48 cents
a barrel lower at $53.96 by 1229 GMT, down from $54 in late
trading on Thursday.
The NYMEX trading floor was closed on Thursday for the
Thanksgiving Day holiday, though Globex trading continued.
U.S. crude is on course to end the month down more than 20
percent, despite a 2 million barrel per day supply cut by the
Organization of the Petroleum Exporting Countries (OPEC) agreed
at meetings in September and October.
"In theory, if supply gets cut, prices should go up, but the
problem is what is the level of demand," said Adrian Pankiw,
strategist at fund manager Henderson Global Investors.
"The question is, is OPEC cutting supply faster than demand
is falling."
Falls in demand in top energy consumer the United States and
other industrialised countries have helped drive U.S. crude down
almost $100 from a record peak of more than $147 a barrel in
July. It fell fell by almost one-third last month, its biggest
monthly drop ever.
Global oil demand is predicted to decline slightly this year
and next, the first fall in a generation because of the world
economic downturn, according to a Reuters poll. []
THIRD SUCCESSIVE CUT?
OPEC has not ruled out making its third output cut in as
many months, but some believe the full impact of its existing
cuts have yet to be felt.
"Combined with weakening non-OPEC supplies, the projected
OPEC's output curtailment suggests that the oil market could
actually tighten moving into 2009," Barclays Capital said in a
research note.
Oil futures prices several years out are already showing a
return to an upward track. For November 2010, for example, the
price is above $70 a barrel and for November 2013 more than $80.
Several OPEC delegates have said the Cairo gathering is
likely only to measure compliance with existing cuts, leaving a
decision on any further reduction until the group's next
policy-setting meeting on Dec. 17 in Algeria.
Shokri Ghanem, the head of the Libyan OPEC delegation, has
said another immediate cut should not be ruled out.
Iran's Oil Minister Gholamhossein Nozari said on Friday the
Cairo talks would likely review market conditions but any final
decisions on output levels would be deferred to their meeting
next month.
"It is a consultative meeting," Nozari said.
(Additional reporting by Maryelle Demongeot in Singapore;
editing by Karen Foster)
