(Updates prices)
By Matthew Robinson
NEW YORK, Jan 29 (Reuters) - Oil rose $1 to over $92 a
barrel on Tuesday as expectations the U.S. Federal Reserve
would cut interest rates again this week and OPEC would
maintain output cuts offset concerns of a potential U.S.
recession.
Crude added to gains from the previous three sessions as
bullish sentiment returned after the U.S. government last week
unveiled a plan to stimulate the economy and the Federal
Reserve made a three-quarter-point emergency rate cut.
U.S. crude <CLc1> traded up $1.08 to $92.07 at 2135 GMT,
after settling earlier up 65 cents to $91.64 a barrel.
London Brent crude <LCOc1> settled up 62 cents at $92.00 a
barrel, adding to its recent premium to U.S. oil.
Fears the subprime mortgage crisis could tip the U.S.
economy into recession and dampen oil demand knocked crude off
a record high above $100 hit on Jan. 3.
Many analysts expect the Fed will reduce interest rates
again this week after last week's cut.
U.S. economic data released Tuesday were mixed, with
stronger-than-expected orders for U.S.-made durable goods in
December countering a record fall in house prices in November.
Expectations OPEC will leave production levels unchanged
when it meets this week in Vienna despite calls from the United
States and other consumers for the cartel to open the taps to
bring down prices have also supported prices.
"The economic durable goods report was bullish for equities
and seemed to support (oil) as well," said Tom Bentz of BNP
Paribas Commodity Futures Inc.
"(OPEC members) are not going to be raising any output, it
looks like it is going to be a rollover," he said, adding:
"The expected interest rate cut has been supportive as well."
STEADY OPEC
Ecuador's oil minister said on Tuesday oil supplies to
international markets were adequate and there was no need for
OPEC to change output at its meeting in Vienna on Friday.
"We believe that oil production levels are adequate,"
Ecuador's Galo Chiriboga told Reuters. When asked if the group
needed to change output, he replied "No."
U.S. Energy Secretary Sam Bodman reiterated calls for OPEC
to increase output to help rebuild global inventories.
"I think that some increase in supply is warranted," Bodman
told reporters, adding a boost in OPEC production may lower oil
prices. "That would help our economy."
Iran Oil Minister Gholamhossein Nozari told an Iranian
newspaper "there was no need to supply more oil as the market
was supplied sufficiently and its conditions were stable."
The downturn in the U.S. economy has shaken some
speculative investors out of oil markets, experts say.
Speculators, blamed by OPEC for sending prices into triple
digits at the start of the year, slashed bets U.S. crude prices
would rise last week, according to a government report.
Oil also rose after news output the giant Cantarell oil
field in Mexico, one of the top suppliers to the United States
was expected to fall this year by 200,000 barrels per day
(bpd). Production at the field was running at around 1.26
million bpd in December. []
A Reuters poll of analysts ahead of weekly U.S. government
inventory data forecast a 2.4 million barrel rise in crude
stocks, a 1.9-million-barrel build in gasoline stockpiles and a
1.7-million-barrel distillate draw. []
(Additional reporting by Santosh Menon in London and Felicia
Loo in Singapore; Editing by Marguerita Choy)
