Oil eases below $58 after surge on shares rally

Oil edged down below $58 on Friday, as focus returned to growing signs of a global recession and slowing demand, after prices climbed almost 4 percent the previous day on a run-up in equity markets.
U.S. crude futures for December shed 42 cents to $57.82 a barrel at 0650 GMT, after closing $2.08 higher on Thursday.
Oil is down almost $90 a barrel since its record of $147.27 in July, and touched $54.67 on Thursday, the lowest since January 30, 2007. London Brent crude for January, the new front-month, lost 51 cents to $55.73 a barrel.
Expectations that OPEC would cut output again late this month had also lent support, but some analysts said it was premature to conclude that the market had hit a bottom, pointing to high U.S. oil stockpiles and slowing world oil demand growth.
"I definitely don't agree with the view that oil prices have bottomed out. No one can say where that would be," said David Moore, commodities strategist at the Commonwealth Bank of Australia.
He said the share market rebound in the United States, Australia and Asia as well as the dip in the U.S. dollar had earlier aided oil's rise.
Stock markets in Japan and Hong Kong led the region's surge on Friday on the back of the more than 6 percent rally in U.S. equity markets overnight, as this week's plunge was deemed excessive, although the global economy remained in danger ahead of a G20 meeting this weakened.
The U.S., China and Germany all provided fresh evidence of the global economic slide, while the Organization for Economic Co-operation and Development cut its economic output forecasts for the United States, Japan and the euro zone, saying it sees all three sliding into recession.
The dollar eased versus the yen on Friday after a sharp rise a day earlier, as investors returned to the perceived safe haven of the Japanese currency amid fears about the global credit crisis.
"Without any doubt the economy is still a major worry and key factor that still hangs over the market," Moore said.
OPEC POISED FOR MORE CUTS
Following OPEC President Chakib Khelil's comments on Thursday that the cartel would "take the right decision" at an emergency meeting on November 29, analysts said the market had likely already discounted the eventuality of further output cuts.
Most analysts expect the Organization of the Petroleum Exporting Countries to make at least another 1 million barrels per day (bpd) cut, on top of the 1.5 million bpd members of the group have so far shown that they have started cutting after last month's decision.
"If a potential further cut in OPEC supply ends up too low, it will have little effect on the current market psychology which remains demand/economy focused," BNP Paribas analyst Harry Tchilinguirian said in a note.
"On the other hand, if the potential additional cut is announced too high, doubts will be raised on whether the implementation (on top of the previous cut) is realistically achievable given fiscal balances of some of the members are already strained by the fall in prices."
U.S. inventory data also pointed to a more bearish trend, as total product demand fell 6.6 percent in the past four weeks and after the International Energy Agency cut its global oil demand growth forecasts amid more evidence the world economy is far weaker than thought.