UPDATE 5-Oil steady around $73, outlook for demand weighs

                                
 * Worries about global recovery, oil demand weigh on markets
                                
 * China January official PMI posts first dip in eight months
                                
 * U.S. 2010 budget deficit soars to record $1.56 trillion
                                
 
 (Updates prices)
                                
 By Christopher Johnson
                                
 LONDON, Feb 1 (Reuters) - Oil consolidated around $73 per
barrel on Monday, stabilising after three weeks of falls, with
the outlook still clouded by concerns over the prospects for
global growth and sluggish fuel demand.
                                
 Fresh economic data out of China, the world's second-largest
energy consumer, heightened concerns that Beijing would further
tighten monetary policy. [ID:nTOE61003S]
                                
 Economists say tighter Chinese monetary policy could choke
off economic recovery if it reins in domestic consumption.
                                
 U.S. crude for March delivery <CLc1> rose 37 cents to $73.26
a barrel by 1447 GMT. Prices touched $72.43 on Jan. 29, the
lowest intraday price since Dec. 21. London Brent crude <LCOc1>
rose 43 cents to $71.89.
                                
 Oil prices ended January down more than 8 percent, pressured
by data showing tepid energy demand in the United States,
worries about fiscal turmoil in smaller euro zone countries and
a stronger U.S. dollar.
                                
 Commodities prices sometimes move inversely to the dollar as
they are priced in the U.S. currency. [FRX/]
                                
 The dollar came under some pressure on Monday after news
that President Barack Obama expected the U.S. budget deficit
would soar to a record in 2010, challenging his push for fiscal
responsibility while driving to defeat mass unemployment.
[ID:nN31157907] [.DXY]
                                
 
                                
 "SHORT-TERM REBOUND"
                                
 "Oil prices are up a little in a short-term rebound," said
Eugen Weinberg, commodities analyst at Commerzbank in Frankfurt.
                                
 "This is not a trend higher but a reaction after three weeks
of falls. The fundamentals have not improved, the market is
still over supplied and demand is not there yet."
                                
 Markets are bracing for economic data this week culminating
in non-farm payrolls on Friday. [ID:nN29208716]
                                
 A key U.S. January manufacturing report at 10:00 a.m. EST
(1500 GMT) is expected to give a reading of 55.2, showing an
expanding sector for the sixth straight month.
                                
 European equities turned positive in afternoon trade on
Monday, supported by early gains on Wall Street, with strength
in banks offsetting some weakness in defensive food producers.
By 1438 GMT, the pan-European FTSEurofirst 300 <.FTEU3> rose 0.1
percent to 1,012.58 points. [.EU]
                                
 In January, the European stock index suffered its worst
monthly loss since February 2009, knocked by worries over Greek
debt and the prospect of more regulation of the banking system.
                                
 Major oil companies also report this week, led by Exxon
Mobil <XOM.N>, which on Monday announced a better-than-expected
23 percent decline in its fourth-quarter profit on Monday.
                                
 Exxon said weak demand for fuel during the economic slowdown
hurt its refining business. [ID:nN01189745]
                                
 BP Plc <BP.L> reports results on Tuesday and Royal Dutch
Shell <RDSa.L> follows with its data on Thursday.
                                
 Shell said on Sunday it shut three oil flow stations in
Nigeria's Niger Delta after a key crude oil pipeline was
sabotaged. [ID:nLDE60U0KC]
 (Additional reporting by Fayen Wong in Perth; editing by Sue
Thomas)