LONDON (Reuters) - Oil rose above $55 a barrel on Tuesday, after a slide to a new 22-month low earlier in the session, depressed by the gloomy outlook for the world economy.
U.S. light crude oil for December delivery was 50 cents up at $55.45 a barrel by 10:34 a.m. EST. It had touched $54.13, its lowest level since January 2007.
London Brent crude was 24 cents up at $52.55 a barrel.
The market has been under pressure as evidence of a severe global slowdown continues to emerge.
"Amidst an endless chain of bearish economic data, crude prices seem incapable of finding a bottom," J.P. Morgan said in a research note.
"However, we suspect that the low in prices will be seen in the coming three months and reductions in capital expenditure and the postponement of future projects leads to the potential for a more bullish future," the U.S. bank said.
Oil has fallen more than 60 percent from its July record above $147 a barrel as the credit crisis has hit the real economy. This has affected fuel demand in the United States, the world's biggest energy consumer, and other industrial countries.
OPEC
OPEC, source of around 40 percent of the world's oil, has so far agreed to remove around 2 million barrels per day from oil markets to try to halt the oil market's slide.
Iran, for example, has called for another 1 million to 1.5 million bpd cut.
OPEC's President Chakib Khelil said last week a gathering of core oil producers in Cairo on November 29 could be expanded into a full-scale OPEC meeting.
But at the weekend he said the group might have to wait until another session set for December 17 in Oran, Algeria to reduce output further.
The group's Secretary General Abdullah al-Badri also said late on Monday it was too soon to say whether further action was needed yet.
J.P. Morgan said calls from certain OPEC members for additional cuts were unlikely to do much to curb falling prices until the existing cutbacks took effect.
"The first round of cuts needs to be quick and convincing in order to provide the basis for a second one," the bank said.
Looking to U.S. fuel inventory data on Wednesday, a preliminary Reuters poll predicted crude stocks are likely to have risen last week by 900,000 barrels.
(Additional reporting by Annika Breidthardt in Singapore; editing by Anthony Barker)
