London (Reuters) - Oil recovered more than $2 a barrel to rise above $44 on Wednesday after an overnight slump by 4 percent on grim forecasts of lower U.S. demand.
The market looked to Wednesday's weekly U.S. inventory report that may show rising crude stocks, and then to OPEC's December 17 meeting where the group is expected to cut more output.
U.S. crude for January delivery rose $2.02 to $44.09 a barrel by 1323 GMT. On Tuesday oil fell $1.64, or 3.75 percent, to settle near a four-year low of $42.07 a barrel.
London Brent crude was up 196 cents at $43.49.
Analysts said gasoline pump purchase data in the United States on Tuesday showed its first year-on-year increase since April, with sales up 0.3 percent in the week ending December 5.
"We can't really talk about 'demand destruction' in the U.S. anymore," said Olivier Jakob, an analyst at Petromatrix.
The Mastercard data is an estimate based on gasoline pump sales and differs from the U.S. Department of Energy's weekly demand data, which is an implied estimate at loading terminals.
The U.S. Energy Information Administration (EIA) on Tuesday said it expected global oil demand to fall 50,000 barrels per day in 2008 and 450,000 bpd in 2009, marking the first drop in world oil demand year-to-year since 1983.
The lower forecast came as EIA revised its 2009 world GDP growth estimate down to 0.5 percent from 1.8 percent last month.
The EIA's weekly inventory data due at 1535 GMT could show that crude stocks rose 1.0 million barrels, according to an expanded poll of 13 analysts by Reuters.
GOOD NEWS, BAD NEWS
Asian stocks rallied more than 3 percent to a one-month high on Wednesday on hopes governments worldwide would help out ailing industries and implement stimulus measures as they combat a deepening financial crisis.
European shares .FTEU3 were up 0.2 percent in choppy trade.
But in spite of a market inspired by hopes of worldwide government help for ailing industries and stimulus measures, overall economic indicators showed little in the way of optimism.
China's November crude oil imports hit a year low, as the world's second-largest oil user shipped in 13.36 million tonnes last month, official data showed, a 14.6 percent cut in daily volumes from October and 1.8 percent down on November last year. Continued...
