* Extends gains on share markets rebound, dlr dip, OPEC
news
* Analysts don't think market has reached bottom
* Looming recession, sliding demand offer grim backdrop
SINGAPORE, Nov 14 (Reuters) - Oil extended gains above $58
on Friday after climbing almost 4 percent the previous day, as
a recovery in equity markets countered increasing signs of a
global recession and slowing demand.
Expectations that OPEC would cut output again late this
month also lent support, but some analysts said it was
premature to conclude that the market had hit a bottom,
pointing to high U.S. oil stockpiles and slowing world oil
demand growth.
U.S. crude futures for December <CLc1> rose 33 cents to
$58.57 a barrel at 0316 GMT, after closing $2.08 higher on
Thursday.
Oil is down almost $90 a barrel since its record of $147.27
in July, and touched $54.67 on Thursday, the lowest since Jan.
30, 2007.
London Brent crude for January <LCOc1>, the new
front-month, edged up 27 cents to $56.51 a barrel.
"I definitely don't agree with the view that oil prices
have bottomed out. No one can say where that would be," said
David Moore, commodities strategist at the Commonwealth Bank of
Australia, adding that the share market rebound in the United
States, Australia and Asia as well as the dip in the U.S.
dollar aided oil's rise.
Stock markets in Japan and Hong Kong led the region's surge
on Friday on the back of the more than 6 percent rally in U.S.
equity markets overnight, as investors snapped up beaten down
shares despite more grim economic news.
The U.S., China and Germany all provided fresh evidence of
the global economic slide, while the Organisation for Economic
Co-operation and Development cut its economic output forecasts
for the United States, Japan and the euro zone, saying it sees
all three sliding into recession. []
The dollar eased versus the yen <JPY=> on Friday after a
sharp rise a day earlier, as investors returned to the
perceived safe haven of the Japanese currency amid fears about
the global credit crisis. []
"Without any doubt the economy is still a major worry and
key factor that still hangs over the market," Moore said.
OPEC POISED FOR MORE CUTS
Following OPEC President Chakib Khelil's comments on
Thursday that the cartel would "take the right decision" at an
emergency meeting on Nov. 29, analysts said the market had
likely already discounted the eventuality of additional output
cuts.
"But the question is how much," said BNP Paribas analyst
Harry Tchilinguirian.
Most analysts expect the Organization of the Petroleum
Exporting Countries to make at least another 1 million barrels
per day (bpd) cut, on top of the 1.5 million bpd members of the
group have so far shown that they have started cutting after
last month's decision.
"If a potential further cut in OPEC supply ends up too low,
it will have little effect on the current market psychology
which remains demand/economy focused," Tchilinguirian said in a
note.
"On the other hand, if the potential additional cut is
announced too high, doubts will be raised on whether the
implementation (on top of the previous cut) is realistically
achievable given fiscal balances of some of the members are
already strained by the fall in prices."
U.S. inventory data also pointed to a more bearish trend,
as total product demand fell 6.6 percent in the past four weeks
and after the International Energy Agency cut its global oil
demand growth forecasts amid more evidence the world economy is
far weaker than thought.
U.S. crude stocks were steady against expectations of an
increase, gasoline inventories rose by a more-than-expected 2
million barrels, heating oil rose 1.3 million barrels ahead of
winter, while distillates gained 600,000 barrels. []
(Reporting by Ramthan Hussain; Editing by Michael Urquhart)
