Oil rises towards $59 as OPEC haggles over deal

LONDON, Oct 11 (Reuters) Oil rose toward on Wednesday while OPEC haggled over the details of an output cut and the West's energy watchdog cut its demand growth forecast for next year.

U.S. crude was up 28 cents at .80 a barrel by 1505 GMT, just over a dollar above the eight-month low last week at .75.

London Brent crude was up 16 cents at .50.

OPEC ministers were united on the need to remove a million barrels from daily oil supply, but divided on how to do it.

Nearly two weeks has passed since first news of a voluntary supply cut from Nigeria on Sept. 28.

''Are they going to cut or aren't they? It's amazing that it has been nearly two weeks since the first word on this cut,'' said Chip Hodge, managing director at John Hancock Financial Services in Boston.

''But then it has been a long time since the last OPEC cut and this shows how it is never easy to get everybody on board for a cut.'' The main stumbling block appears to be whether to make a reduction from OPEC's notional 28 million-bpd production ceiling or from actual supply of nearly 27.5 million bpd in September.

Qatar's oil minister Abdullah bin Hamad al-Attiyah told reporters on Wednesday he expected the cut to come from actual output. He said a formal statement could be issued within two or three days or the group could meet sometime between Oct. 16-18.

''There is consensus for the 1 million cut, there is no objection,'' he said. ''The (OPEC) president should now decide whether there should be a statement or a meeting somewhere.'' The cut would be OPEC's first in two and a half years and is aimed at stemming a near- fall in the price of oil from July's peak of .40.

LOWER DEMAND The International Energy Agency (IEA) on Wednesday trimmed its forecast for global oil demand growth next year by 90,000 barrels per day (bpd) to 1.45 million bpd because of slightly weaker U.S. demand.

The IEA, adviser to 26 industrialised nations, revised its forecast for U.S. demand growth after the International Monetary Fund (IMF) last month cut its forecast for U.S. economic growth in 2007.

Some investors say OPEC's cut may be too little or too late to offset swelling inventories and slowing demand forecasts.

''Basically fundamentals are weak with accumulated stocks of crude oil and products, and maybe decreasing demand from Asian markets, other than China, and the U.S.,'' said Keiichi Sano, manager with the commodities business unit at Sumitomo Corp.

U.S. data due on Thursday -- a day later than usual -- is expected to show a 100,000 barrels rise in distillate stocks, a Reuters survey found. [EIA/S] Stocks were already at their highest level since January 1999 the previous week and mild temperatures have stemmed demand for heating fuels.

Crude stocks were expected to rise 800,000 barrels.

U.S. government weather forecasters said on Tuesday they expected El Nino to bring warmer-than-average temperatures across much of the country for the winter season.

Also bearish for prices is that Iraq pumped crude exports through its vulnerable northern pipeline to Turkey on Wednesday for the first time in over a month.

Sabotage attacks have mostly idled the line since the U.S.-led invasion of Iraq in March 2003.

REUTERS PKS DB2044