* Oil nears $100 drop from July record high
* Oil firms to store crude on tankers as demand slumps
* OPEC may cut supply in Cairo, says Libya
(Recasts, updates prices)
By Annika Breidthardt
SINGAPORE, Nov 21 (Reuters) - Oil rebounded from an early
three-and-a-half year trough below $49 a barrel on Friday,
tracking Asian equities that bounced back on rumours that China
may cut interest rates later in the day.
Still, its 12 percent fall so far this week took oil close
to a $100 drop from its July record high and set it on course
for the steepest weekly decline since the week of October 6.
U.S. light crude for January delivery <CLc1> rose 64 cents
to $50.06 a barrel at 0622 GMT, its first increase after five
straight sessions of losses. Earlier it fell to $48.25, the
lowest in three and a half years.
London Brent crude <LCOc1> gained 92 cents to $49.00 a
barrel.
Asian stock markets rebounded from a five-year low touched
earlier on Friday as a variety of rumours such as China cutting
interest rates later in the day prompted investors to cover
short positions before the weekend.
Earlier, Asian stocks had plummeted, tracking U.S. stocks
that hit their lowest in a decade the previous session as the
fate of the country's major car makers continued to hang in the
balance.
"The economy is pulling everything down like a black hole,"
said Anthony Nunan, risk management executive at Tokyo-based
Mitsubishi Corp. "Until the economy stabilises, it will be hard
for oil to put in a bottom."
Oil has lost two thirds of its value in just under four
months since peaking above $147 in July as the financial crisis
grips economies around the globe and limits demand for fuel.
Reflecting the sharp reversal in oil's fortunes, Goldman
Sachs, which in May had been talking of a $200 a barrel
superspike, on Thursday again cut its 2009 forecast for U.S.
crude oil to $80 a barrel from $86. []
As demand tumbles, oil companies plan to store millions of
barrels of crude in the hope economics will improve.
Shipping brokers said U.S. oil trader Koch and Royal Dutch
Shell <RDSa.L> had booked supertankers capable of storing 10
million barrels of crude, more than top exporter Saudi Arabia
produces in a day. []
The further falls in oil prices brought more Organization
of the Petroleum Exporting Countries members out in support of
further output cuts.
Libya's top oil official said the cartel may decide to
reduce supply further at its informal meeting in Cairo next
week if it finds members have implemented a previous decision
to lower output. []
The comments followed remarks from other OPEC members,
including Kuwait, Iran and Venezuela, raising the possibility
of a further cut in supply to prop up oil prices.
OPEC agreed in October to cut output by 1.5 million barrels
per day, about 5 percent, from Nov. 1, but the move has failed
to stem the decline in oil prices.
(Reporting by Annika Breidthardt; Editing by Clarence
Fernandez)
