By Christopher Johnson LONDON (Reuters) - Oil rose by more than a dollar to nearly $45 on Wednesday ahead of an OPEC meeting in Algeria widely expected to announce a big cut in production in an attempt to halt a collapse in oil prices. A tumbling U.S. dollar after a bigger-than-expected cut in interest rates by the U.S. Federal Reserve also helped oil. Oil ministers from the Organization of the Petroleum Exporting Countries appeared to be near consensus on a cut in output of 2 million barrels per day (bpd), the biggest reduction ever by the producer group. U.S. light crude for January delivery, due to expire on Friday, rose $1.10 to $44.70 a barrel by 5:00 a.m. EST after having fallen to a low of $42.56 in the previous session, just off a four-year trough of $40.50 a barrel hit on December 5. London Brent crude for February delivery was up $1.30 at $47.95. Oil prices have tumbled more than $100 from the July all-time record above $147 a barrel as financial turmoil has slowed global economic growth and hit fuel demand. OPEC is desperate to halt the slide in prices. Economists say that at $40 per barrel, 11 of OPEC's 12 members, as well as Russia and Mexico, face budget deficits. But a large cut has been widely flagged by oil ministers and dealers say the move has already been priced into the market. EXTRA SUPPORT "A 2.0 million bpd cut in production now runs the risk of a 'Buy the rumor Sell the fact' scenario," Rob Laughlin, analyst at MF Global said. "It would have been bullish for the market a week ago. But we have been warned to expect it now so I think the market will go up initially but then come down further." Analysts said any extra support OPEC could get from non-members would help support oil prices. Russia, the world's largest non-OPEC producer, has sent a high-level delegation to observe the meeting. Its deputy Prime Minister Igor Sechin, said Russia could cut oil exports by as much as 320,000 bpd but told Reuters cooperation with OPEC would progress only 'step by step.' Azerbaijan said it could also support any OPEC decision. But Mexico, which supported OPEC cuts in 1999 and 2001, said it would not cut as its output was declining. [nN16293472] "If OPEC can bring someone else in with a sizeable reduction then I think that may begin to have more of an impact," said Simon Wardell, analyst at Global Insight. "If Russia announces something substantial, I think it will have more of an effect on sentiment than if OPEC has to go it alone."

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