UPDATE 4-Oil slides towards $89 as falling stock markets weigh

                                
   (Adds comments, updates prices)
                                
 By Santosh Menon
                                
 LONDON, Jan 28 (Reuters) - Oil fell more than a dollar
towards $89 a barrel on Monday as falling global stock markets
amid renewed worries about the health of the global economy 
[MKTS/GLOB] spurred profit taking.
                                
 Expectations that OPEC is unlikely to agree to boost supply
when ministers meet later this week prevented deeper losses.
                                
 U.S. light, sweet crude for March delivery <CLc1> slid $1.51
to $89.20 a barrel by 1114 GMT. Prices gained 14 cents last week
after clawing back from a six-week low of $86.11 a barrel.
                                
 Brent crude in London <LCOc1> was down $1.33 at $89.57 a
barrel, and, like in the early part of 2007, was trading at a
small premium to U.S. crude, the market benchmark.
                                
 "Traders are squaring their positions before the OPEC
meeting, hence there is some profit-taking," said Tetsu Emori of
Japan's Astmax Futures Co Ltd.
                                
 After falling sharply early last week, as growing despair
over the U.S. economy rattled global equity markets, oil bounced
back from Thursday as U.S. legislators and the White House
hammered out a $150 billion stimulus plan. [ID:nN24261782]
                                
 But with prices lately moving in sync with stock markets,
traders began to fear that Friday's $1.30 surge might have been
overdone after Wall Street ended the week on a weak note
following two days of sharp gains. [.N]
                                
 Worries over the health of the U.S. economy, and with it the
global economy, hit shares across Asia and Europe on Monday.
                                
 While many analysts say the risk of an economic slowdown
could still take some steam out of oil prices that are not far
off their record high of $100.09, a thirst for alternative
investments and OPEC's resolve have limited the downside so far.
                                
 
                                
 ATTENTION TURNS TO OPEC
                                
 Attention this week will shift to Vienna, where OPEC
ministers will meet on Feb. 1 to discuss production rates,
although the market is not expecting a boost in output.
                                
 "The U.S. inventory data and OPEC meeting are the two
important drivers of oil prices in the near term. I do not
expect OPEC to add production," said Badung Tariono, an
Amsterdam-based fund manager for ABN AMRO's energy fund.
                                
 Many officials have said they do not see the need to pump
extra oil, despite the growing threat of recession and
seasonally weak second-quarter demand, as crude inventories are
comfortable.
                                
 For OPEC ministers comments click on: [ID:nL24826154]
                                
 The International Energy Agency's executive director last
week expressed concern about the strength of the world economy
and said oil producers could help the situation by pumping more.
                                
 Prices may remain hostage to the fortunes of global stock
markets, which gyrated wildly last week, forcing some oil
speculators to shed positions to cover margin calls.
                                
 U.S. regulator data on Friday showed that speculators in the
NYMEX crude oil market slashed their bets on rising prices in
the week to Jan. 22 to their lowest since mid-December, cutting
net length by nearly 50,000 lots to 37,000. [nN25371369]
                                
 "It shows the large speculative funds reducing aggressively
their net length exposure on futures through a combination of
long liquidation and fresh short positions," said Olivier Jacob
at Petromatrix.
 (Additional reporting by Jonathan Leff and Felicia Loo in
Singapore; Editing by James Jukwey)