* Oil rebounds from steep 9-pct fall the previous day
* EIA stock data in focus, 2.9 mln bbl crude build expected
* U.S. House set to pass $825 bln stimulus package
(Updates prices)
By Chua Baizhen
SINGAPORE, Jan 28 (Reuters) - Oil rebounded above $42 a
barrel on Wednesday from a 9-percent fall a day ago, as worries
over demand due to the faltering global economy eased.
Traders will watch for weekly U.S. inventory data from the
Energy Information Administration (EIA) due later in the day,
after the American Petroleum Institute (API) reported a much
smaller than expected crude stockbuild on Tuesday.
U.S. crude <CLc1> rose 50 cents a barrel to $42.08 by 0611
GMT, and London Brent crude <LCOc1> climbed 60 cents to $44.33.
"It's just an illiquid dead cat bounce," said Jonathan
Kornafel, Asia director of U.S.-based options house Hudson
Capital Energy.
Oil prices had plunged 9 percent on Tuesday on fresh
indications that the world's top energy consumer the United
States was still deeply mired in recession.
Consumer confidence in the world's top consumer fell to a
record low in January, a survey showed, and U.S. home prices
plunged a record 18.2 percent in November from a year earlier,
according to data from Standard & Poor's.
Governments pledged billions of dollars on Tuesday to
rescue their battered economies, with U.S. Democratic President
Barack Obama approaching opposition lawmakers to support his
$825 billion stimulus proposal. []
Most Republicans in the U.S. House of Representatives were
expected to oppose the proposal, saying it needs more tax cuts
and less spending, but Democrats were confident they had the
votes to push it through. []
Traders will also watch for the results of a key two-day
Federal Reserve meeting due out later in the day, with policy
makers expected to hold their target for official borrowing
costs in a range of zero to 0.25 percent. []
The global economic crisis has weakened crude demand,
especially in developed economies, and knocked prices off peaks
of over $147 a barrel hit in July.
U.S. crude stocks are expected to have risen for the fifth
straight week last week by 2.9 million barrels, an expanded
Reuters poll showed, much higher than the 800,000-barrel build
the API reported on Tuesday. [] []
The API has begun releasing its weekly inventory report on
Tuesday afternoons, a day ahead of the official EIA report.
Supply cuts by the Organization of the Petroleum Exporting
Countries (OPEC) since second-half 2008 have given oil markets
some support against the gloomy demand backdrop.
Kuwait said on Tuesday it would support a further output
cut if needed, echoing comments by some other OPEC members,
while smallest member Ecuador said it would comply with the
production cuts agreed by the cartel. []
[]
OPEC next meets on March 15 to decide on output policy.
Some analysts say current cuts may be insufficient to end the
steep drop in prices.
"You have a tug-of-war. OPEC following through hardcore
(with the output cuts) has given a bit of push to the market
but in the meantime it's going to be demand," Kornafel said.
(Editing by Clarence Fernandez)
