* China growth predictions down
* Hopes of more cuts at OPEC meeting next week
* Bearish data likely from US energy weekly inventory report
(Recasts, adds details, previous SINGAPORE)
By Chris Baldwin
London, Dec 10 (Reuters) - Oil recovered more than $1 a
barrel to around $43 on Wednesday after an overnight slump by 4
percent on grim forecasts of lower U.S. demand.
The market is looking to Wednesday's weekly U.S. inventory
report likely to show rising crude stocks, and later to OPEC's
Dec. 17 meeting where the group is expected to cut more output.
U.S. crude for January delivery <CLc1> was up 98 to $43.05 a
barrel by 0940 GMT, after earlier touching $43.49. On Tuesday
oil fell $1.64, or 3.75 percent, to settle near a four-year low
of $42.07 a barrel.
London Brent crude <LCOc1> was up 96 cents at $42.49, off a
session high of $42.75.
Analysts expect oil prices to remain erratic as markets
scramble for a hold on slippery economic indicators that could
signal a shift from the rapid decline off record highs in July.
"The market is behaving like a young adolescent in the early
stages of puberty - one minute all confidence and bravado,
swiftly followed by a total loss of esteem and collapse,"
technical analysts at PVM said in a note.
GOOD NEWS, BAD NEWS
Asian stocks rallied more than 3 percent to a one-month high
on Wednesday on hopes governments worldwide would help out
ailing industries and implement stimulus measures as they combat
a deepening financial crisis. []
But overall economic indicators showed little in the way of
optimism for the beginnings of a global recovery, instead
pointing at worsening demand and a murky future.
A plunge in China's wholesale inflation rate further dented
hopes resilience there would ease recession's pains elsewhere.
The World Bank predicted on Wednesday that China's economy
would grow 7.5 percent next year and 8.5 percent in 2010, far
below the expected 9.4 percent for the current year and the 11.9
percent clocked in 2007.
The U.S. Energy Information Administration (EIA) on Tuesday
said it expected global oil demand to fall 50,000 barrels per
day in 2008 and 450,000 bpd in 2009, marking the first drop in
world oil demand year-to-year since 1983.
The lower forecast came as EIA revised its 2009 world GDP
growth estimate down to 0.5 percent from 1.8 percent last month.
The EIA's weekly inventory data due at 1535 GMT could show
that crude stocks rose 1.0 million barrels, according to an
expanded poll of 13 analysts by Reuters.
Producer group OPEC, faced with a loss of more than $100 a
barrel in oil prices since July, has already agreed to cut about
2 million bpd to support prices, and members are leaning toward
more cuts at their upcoming meeting in Algeria. []
OPEC kingpin Saudi Arabia, which has called $75 a barrel a
"fair price", will make bigger supply cuts to some of its Asian
and European customers next month, as it redoubles efforts to
arrest slumping crude. []
(Additional reporting by Jennifer Tan in Singapore; editing by
James Jukwey)
