* Saudi cuts supplies to majors for Jan ahead of OPEC meet
* U.S. fuel stocks rose sharply last week
(Recasts, updates prices, market activity; changes dateline,
previously LONDON)
NEW YORK, Dec 10 (Reuters) - Oil prices jumped 8 percent on
Wednesday on signs that OPEC kingpin Saudi Arabia has slashed
supplies to customers for January as the economic crisis
continues to slow demand.
Saudi Arabia told major customers it was reducing supplies
substantially next month in a move that could bring the
kingdom's output below its implied OPEC target of 8.47 million
barrels per day. nLA242713
"There are quite severe cuts -- they are going to be
seriously cutting back," a trader with one major customer
said.
U.S. crude CLc1> jumped $3.22 to $45.29 a barrel by 12:44
p.m. EST (1744 GMT) after touching a session high of $46.17.
London Brent crude LCOc1> traded up $2.72 to $44.25 a barrel.
OPEC next meets on Dec. 17, and the group is widely
expected to agree to more output cuts. Slumping demand in the
United States and other developed economies has knocked crude
down sharply from record highs over $147 struck in July.
A U.S. Energy Information Administration report this week
forecasting the first contraction in world oil demand since
1983 added to expectations that OPEC will deepen cuts.
"This news about the Saudis getting ready to make its cut
confirms what appears to be a foregone conclusion that indeed,
the group will cut some more," Phil Flynn, analyst at Alaron
Trading in Chicago, said.
Earlier, crude came under pressure as U.S. inventory data
showed rising fuel stocks in the world's top consumer as demand
slumps.
Distillate stocks rose by 5.6 million barrels in the week
to Dec. 5, according to Energy Information Administration,
while gasoline stocks gained 3.8 million barrels. Crude
inventories rose slightly. nN10399549
Total U.S. product demand fell 6.1 percent over the past
four weeks against year-ago levels.
Crude imports by No. 2 oil consumer China hit the lowest
level in a year in November.
China's crude imports in November hit their lowest this
year as refiners in the No. 2 oil consumer reined in buying due
to brimming storage and weakening demand. nPEK5246 Russia's
energy minister on Wednesday said OPEC members were preparing a
"significant cut" in oil production, and that Russian output
was likely to decline in 2008 despite government attempts to
stimulate production. ID:nLA698207
(Reporting by Matthew Robinson, Robert Gibbons, Gene Ramos in
New York; Christopher Baldwin and David Sheppard in London and
Denis Dyomkin in Moscow; Editing by David Gregorio)
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