Oil surge 10 percent on IEA report, Saudi cuts
* IEA predicts '09 oil demand growth after '08 contraction
Oil prices surged nearly 10 percent to above $47 a barrel on Thursday after the International Energy Agency forecast global oil demand would rebound next year and Saudi Arabia, the world's top exporter, said it pumped less oil last month than analysts had expected.
World oil demand growth would return in 2009, after shrinking this year for the first time since 1983, the IEA, which advises 28 industrial nations on energy policy, said in a monthly report. It also cut forecasts for supply outside OPEC next year.
"We knew the bad bits, demand down, but the supply downgrade was supportive," said Rob Laughlin of MF Global.
U.S. crude was up $4.44 at $47.96 a barrel by 12:27 p.m. EST (1727 GMT), after hitting a high of $48.35. London Brent crude traded up $4.60 at $47.00 a barrel.
Oil rose as the U.S. dollar weakened after data on weekly U.S. jobless claims came in worse than expected. A weak dollar can boost investor demand for oil and other dollar-denominated commodities.
The IEA's view that demand would grow in 2009 contrasts with that of the U.S. government's Energy Information Administration, which this week forecast consumption would fall by 450,000 barrels per day next year.
The Paris-based IEA also lowered forecasts for supply from outside the Organization of Petroleum Exporting Countries in 2009, leading to a 200,000 bpd increase in the amount it said OPEC needs to pump to balance the market.
SAUDI OUTPUT
Also boosting prices, Saudi Oil Minister Ali al-Naimi said the kingdom pumped 8.49 million bpd of oil in November, less than estimated by analysts and in line with its OPEC target.
"We will give you the November number, because that's what everybody is looking for," Naimi said during a visit to Poznan, Poland. "It's 8,493,300 barrels per day."
That would put the kingdom's output in line with its implied OPEC target of 8.47 million bpd and is 560,000 bpd less than the IEA's estimate of Saudi November production, published earlier on Thursday, of 9.05 million bpd.
Industry sources told Reuters on Wednesday they expected Saudi Arabia's January shipments to be below its existing OPEC target, implying OPEC expects to agree to a further supply cut when the producer group meets in Algeria on Dec. 17.
OPEC's president also raised expectations that a large cut in supplies is coming.
The group should agree to a more "severe" reduction in output at its meeting next week in Algeria, OPEC President Chakib Khelil said in remarks published on Thursday, which made no mention of a figure.
Russia, which will attend the OPEC meeting as an observer amid calls from some members for Moscow to join in output curbs, said on Wednesday it will present its own proposal at the talks.
Oil has fallen by about $100 a barrel from a record high of $147.27 reached in July.