* OPEC should make more severe output cut-president
* Russia says ready to work with OPEC on output cuts
* Dollar drops to seven-week low
* IEA predicts 2009 oil demand growth after 2008 contraction
(Recasts, updates prices)
By Rebekah Kebede
NEW YORK, Dec 11 (Reuters) - Oil surged above $48 a barrel on Thursday,
up more than 10 percent, after the OPEC president called for more "severe"
production cuts and the dollar fell to a seven-week low.
News that Russia's president Dmitry Medvedev said the country was ready
to work with OPEC on possible oil output cuts lent additional support to
the market.
"We are starting to see the real engine for lifting oil prices, cuts in
OPEC production, and it seems likely they will cut production at their
meeting next week," said Tim Evans, energy analyst for Citi Futures
Perspective. "Also in the background is Russia rumbling about possible
coordination with OPEC and that is bullish if carried out."
U.S. crude <CLc1> was up $4.61 at $48.13 a barrel by 12:51 p.m. EST
(1751 GMT), continuing a rebound from near four-year lows hit last week.
European benchmark Brent crude <LCOc1> was up $4.92 at $47.32.
Oil prices are down almost $100 from a record peak of $147.27 scaled in
last summer, as a global financial crisis hits consumer demand for fuel.
OPEC should agree on a more "severe" reduction in output at the meeting
next week in Algeria, OPEC President Chakib Khelil said in remarks
published on Thursday, which made no mention of a figure. []
Saudi Oil Minister Ali al-Naimi said the world's largest exporter
pumped 8.49 million barrels per day of oil in November, less than estimated
by analysts and in line with its OPEC target.
That would put the kingdom's output at 560,000 bpd less than the IEA's
estimate of Saudi November production, published earlier on Thursday, of
9.05 million bpd.
Industry sources told Reuters Wednesday they expected January shipments
to be below Saudi's existing OPEC target, implying it expects OPEC to agree
a further supply cut when the producer group meets in Algeria on Dec. 17.
Russia, which will attend the Algerian meeting as an observer amid
calls from some members for Moscow to join in output curbs, said Wednesday
it will present its own proposal at the talks.
The U.S. dollar weakened after data on weekly U.S. jobless claims came
in worse than expected. [] A weak dollar can boost investor
demand for oil and other dollar-denominated commodities.
RETURN OF DEMAND
A prediction from the International Energy Agency that world oil demand
growth would rebound in 2009 after shrinking this year for the first time
since 1983 was also supportive. The IEA also cut forecasts for supply
outside OPEC next year. []
The IEA's view that demand will grow in 2009 contrasts with that of the
U.S. government's Energy Information Administration, which this week
forecast consumption would fall by 450,000 barrels per day (bpd) next
year.
The Paris-based IEA also lowered forecasts for supply from outside OPEC
in 2009, leading to a 200,000 bpd increase in the amount it said OPEC needs
to pump to balance the market.
(Additional reporting by Alex Lawler in London, Anna Mudeva in Poznan
and Jennifer Tan in Singapore; Editing by John Picinich)
