(Adds comment, updates prices)
By Santosh Menon
LONDON, Jan 29 (Reuters) - Oil eased to under $91 on Tuesday
on profit-taking after an early rally.
Hopes of a fresh U.S. rate cut and forecasts of a draw in
U.S. distillate stocks, coupled with the less likelihood of an
OPEC output boost provided support for oil prices.
U.S. crude <CLc1> 20 cents to $90.79 a barrel by 1550 GMT,
off highs of $91.94 hit earlier in the session.
London Brent crude <LCOc1> was five cents down at $91.33 a
barrel, off highs of $92.19 but still maintaining its
recently-acquired premium to U.S. crude.
"The market is just running into a little profit-taking. The
dollar is stronger after the durable goods number," said Tom
Bentz, an analyst at BNP Paribas.
The U.S. dollar edged up against the euro and the yen after
a report showed unexpectedly high December orders for U.S.
durable goods. []
Countering that, however, was news of a drop in U.S.
consumer confidence in January, with shoppers turning more
negative on current business conditions and their assessment of
the job market. []
Oil, which has been traded lock-in-step with global stock
markets lately, was also weighed down by the failure of the U.S.
market to build on early gains and the earlier rise in Europe.
European shares rose to the day's highs on expectations the
U.S. Federal Reserve would announce yet another aggressive cut
in interest rates this week to ward off a recession. []
A total of 18 out of 20 primary dealers polled by Reuters
forecast the Fed to cut benchmark rates, with 14 expecting a 50
basis points reduction. The Fed cut rates by 75 basis points in
an emergency move last week.
Worries that an economic recession in the United States
could hit oil demand growth have helped pull back crude from
record peaks above $100 in early January.
Hopes for a fresh rate cut were bolstered on Monday by data
showing weaker-than-expected sales of new homes in the United
States, stoking fresh fears of a recession.
"I hope they get it (half a percentage point) or more
carnage will ensue," said Robert Laughlin of MF Global.
SPECULATORS, OPEC
Recent weeks have seen speculators, blamed by some for being
behind the oil rally of the past few months, cut their bets on
rising oil prices. Data on Friday showed NYMEX crude oil
speculators cut their net long positions in the week to Jan. 22
to their lowest since mid-December.
Oil has also found support from expectations the
Organization of the Petroleum Exporting Countries will maintain
output levels when it meets on Friday in Vienna, despite
consumer nations' calls for more oil to bring down prices.
Iran's Oil Minister Gholamhossein Nozari was quoted in an
Iranian newspaper as saying that "there was no need to supply
more oil as the market was supplied sufficiently and its
conditions were stable."
Nigeria's oil minister on Monday said prices were not being
influenced by supply and demand, echoing recent comments from
other OPEC ministers, but added that he was concerned about the
effect of high prices on demand.
A Reuters poll of analysts, ahead of weekly U.S. government
inventory data, forecast crude stocks to rise by 2.1 million
barrels and a 2.0 million-barrel build in gasoline stockpiles
but distillate stocks are expected to fall by 1.9 million
barrels. []
(Additional reporting by Felicia Loo in Singapore, editing by
James Jukwey)
