UPDATE 7-Oil slips below $49 on OPEC compliance

                                
 * OPEC makes only 66 percent of pledged cuts in November
                                
 * U.S., European shares up after heavy losses on Monday
                                
 * U.S. crude stocks likely rose for third time last week
 (Recasts, updates prices; changes dateline from LONDON)
                                
 By Rebekah Kebede
                                
 NEW YORK, Dec 2 (Reuters) - Oil prices fell below $49 a
barrel on Tuesday as news that OPEC made only two-thirds of its
pledged output cuts last month outweighed a rebound in the U.S.
stock market.
                                
 U.S. crude <CLc1> traded 53 cents lower at $48.75 a barrel
by 12:54 p.m. EST (1754 GMT), after touching a new 3-1/2-year
low of $47.36. London Brent <LCOc1> fell 73 cents to $47.24 a
barrel, after touching $46.02, its lowest since February 2005.
                                
 "The story about OPEC still not in full compliance with
pledged output reductions is the reason why crude futures are
down right now," said Phil Flynn, an analyst at Alaron Trading
in Chicago.
                                
 "This lack of compliance is disappointing to the market and
this puts into doubt OPEC's indications that they will make
more production cuts later this month."
                                
 Members of the Organization of Petroleum Exporting
Countries had pledged to lower output by 1.5 million barrels
per day for November, but were only 66 percent compliant with
the target last month, a Reuters survey showed on Tuesday.
[ID:nL2183579]
                                
 Crude prices have fallen nearly $100 a barrel from a peak
of more than $147 in July due to weak demand for oil products
during a mushrooming global economic crisis, pushing the cartel
to agree to supply cuts.
                                
 OPEC's decision to wait until later this month to take more
supply off the market, combined with a steep sell-off in U.S.
stocks, led to a drop of more than 9 percent in U.S. crude oil
futures on Monday.
                                
 Benchmark U.S. stock indexes were up more than 3 percent on
Tuesday as investors hunted for bargains amid optimism about a
government bailout for the U.S. auto industry. [nN02260271]
                                
 OPEC CUTS
                                
 Still, OPEC members remained concerned about oversupply in
the world oil market and may decide to cut output further at
their next meeting in Algeria on Dec. 17.
                                
 "We are concerned about the glut ... I think there is an
indication that we will have another cut," Qatar Oil Minister
Abdullah al-Attiya said. [nWLA2760]
                                
 Top oil exporter Saudi Arabia has highlighted $75 a barrel
as a "fair price" for oil.
                                
 Meanwhile, sources said two OPEC members, the United
Emirates and Kuwait, will increase oil sales to many major
Asian customers, sending mixed signals about OPEC output cuts.
[ID:nT237793]
                                
 More bearish news for oil prices could be in store on
Wednesday, when the U.S. government reports weekly oil
inventory data.
                                
 A preliminary Reuters poll of analysts showed U.S. crude
inventories likely rose by 1.8 million barrels last week, a
third consecutive weekly build, as imports continued to
increase. [EIA/S]
 (Additional reporting by Christopher Johnson and Jane Merriman
in London and Annika Breidhardt in Singapore; Editing by Walter
Bagley)