* OPEC trims March output, but still above target
* Japan business sentiment worst on record
* G20 leaders to meet in London to discuss economy
(Updates prices)
Chris Baldwin
LONDON, April 1 (Reuters) - Oil fell more than 3.5 percent
to below $48 on Wednesday, pressured by bearish economic news
and the prospect of a further rise in U.S. crude inventories,
which are already at their highest since 1993.
U.S crude futures <CLc1> were down $2.06 a barrel by 1305
GMT, eroding Tuesday's 2.6 percent gain.
London Brent crude <LCOc1> was down $1.64 to $47.58.
The U.S. government's Energy Information Administration data
to be released later on Wednesday is expected to show a 2.5
million barrel increase in crude oil inventories. []
That data follows figures from industry group American
Petroleum Institute, which on Tuesday showed crude inventories
rose by a greater-than-expected 3.3 million barrels to 357.8
million barrels in the week to March 27. []
"There is still a steep recession, weak demand and high
stocks," said Mike Wittner of Societe Generale.
But oil prices have recovered strongly from a low of $32.40
hit in December and rose more than 11 percent in the first
quarter of this year.
Gains over the first three months were driven by recovering
stock markets, signs of a greater investor appetite for risk and
output cuts by the Organization of the Petroleum Exporting
Countries.
OPEC COMPLIANCE
The producer group has reached agreements to take away 4.2
million barrels per day from September and has delivered almost
80 percent of the promised reduction.
Reuters latest survey put compliance at 79 percent for
March, the seventh consecutive month in which the group's output
has declined. []
In deciding not to lower its output targets further when it
met in March, OPEC said it was giving the world a chance to
recover from global economic downturn and looked ahead to this
week's G20 meeting in London to stimulate the economy and help
shore up fuel demand. []
Few expect instant results, but many analysts say OPEC,
which meets again at the end of May to reassess the situation,
has taken out enough oil to bolster prices.
In the immediate term, however, the demand outlook is weak
and a fresh flurry of bearish economic news emerged on
Wednesday, which weighed on stock markets and added to the
pressure on oil prices.
Business confidence in Japan, the world's second largest
economy and the third largest oil consumer after the United
States and China, tumbled at its fastest pace ever in the first
quarter to the worst on record, the Bank of Japan's tankan
corporate survey showed. []
Managing Director of the International Monetary Fund
Dominique Strauss-Kahn predicted the world economy would
contract by 0.5 and one percent this year, in an interview
published on Wednesday, following on from IMF reports predicting
a decrease of up to one percent this year. []
(Additional reporting by Ikuko Kao and Barbara Lewis in London
and Fayen Wong in Perth; Editing by James Jukwey)
