Oil holds below $59 on OPEC doubt, US stock rise

SINGAPORE, Oct 31 (Reuters) Oil steadied on Tuesday after a plunge below as traders waited for clear signs OPEC members will curb supplies, leaving fundamentals pressured by an expected rebound in U.S. crude inventories.

U.S. light crude for December delivery was down 3 cents at .33 a barrel by 0239 GMT, after losing nearly 4 percent or SINGAPORE, Oct 31 (Reuters) Oil steadied on Tuesday after a plunge below $59 as traders waited for clear signs OPEC members will curb supplies, leaving fundamentals pressured by an expected rebound in U.S. crude inventories.

U.S. light crude for December delivery was down 3 cents at $58.33 a barrel by 0239 GMT, after losing nearly 4 percent or $2.39 on Monday. Brent crude eased 11 cents to $58.57 a barrel after a $2.40 drop.

Prices slid as fund investors moved money into other commodities, with gold prices hitting a seven-week high and zinc in London touching a record on Monday.

Traders are waiting to see if OPEC producers will adhere to an agreement earlier this month to cut supplies, which may take until the end of November or December as crude from the Middle East takes weeks to arrive in the United States.

''The dominant speculative sentiment remains overwhelmingly bearish,'' said Barclays Capital. ''Those on the short side who are expecting global economic weakness...and weak OPEC cohesion are unlikely to change those core views in a hurry.'' Saudi Arabia and the United Arab Emirates have told customers of supply cuts, but refiners who buy from other OPEC producers such as Kuwait and Libya say they have yet to receive notification of cuts.

Iran will cut European spot crude sales by about 125,000 barrels per day (bpd) from Nov. 1 and trim 55,000 bpd off supply to domestic refiners, an Iranian official told Reuters on Monday.

However Indonesia, the group's second-smallest producer, said on Monday it would not cut output, which has already fallen well below its OPEC quota.

Investor confidence in producer cuts has been dampened by preliminary data for October that showed a slight rise in OPEC output, despite pledges that month to voluntarily cut back from Venezuela and Nigeria.

Nigerian unions on Monday threatened to shut all oilfields from Tuesday operated by Italian oil company Agip, which produces 200,000 bpd in the country, unless it paid staff a security bonus reflecting the rising risks of working in the Niger Delta.

Dozens of oil workers have been kidnapped this year in a rising wave of attacks that have forced Royal Dutch Shell to reduce output in the delta by 500,000 bpd since February.

Industry sources said exports from Saudi Arabia continued unaffected after a threat to the kingdom's oil facilities, easing concerns that boosted oil prices last week and prompted U.S.-led Gulf coalition forces to protect its top offshore oil terminal.

Prices have also eased as forecasts for temperatures in the U.S.

northeast, the world's top heating oil consuming region, are for a return to seasonal norms later this week, after an early cold spell that was seen pushing down fuel stocks last week.

Traders are looking for further direction on demand from U.S.

inventory data due on Wednesday, expected to show a 2.6 million barrel rise in crude after imports returned to normal following a temporary closure of the nation's biggest oil port.

Implied oil demand in the world's second largest consumer China rose a modest 3 percent in September from a year ago, the slowest pace since a contraction in January.

REUTERS PKS SSC1258 .39 on Monday. Brent crude eased 11 cents to .57 a barrel after a SINGAPORE, Oct 31 (Reuters) Oil steadied on Tuesday after a plunge below $59 as traders waited for clear signs OPEC members will curb supplies, leaving fundamentals pressured by an expected rebound in U.S. crude inventories.

U.S. light crude for December delivery was down 3 cents at $58.33 a barrel by 0239 GMT, after losing nearly 4 percent or $2.39 on Monday. Brent crude eased 11 cents to $58.57 a barrel after a $2.40 drop.

Prices slid as fund investors moved money into other commodities, with gold prices hitting a seven-week high and zinc in London touching a record on Monday.

Traders are waiting to see if OPEC producers will adhere to an agreement earlier this month to cut supplies, which may take until the end of November or December as crude from the Middle East takes weeks to arrive in the United States.

''The dominant speculative sentiment remains overwhelmingly bearish,'' said Barclays Capital. ''Those on the short side who are expecting global economic weakness...and weak OPEC cohesion are unlikely to change those core views in a hurry.'' Saudi Arabia and the United Arab Emirates have told customers of supply cuts, but refiners who buy from other OPEC producers such as Kuwait and Libya say they have yet to receive notification of cuts.

Iran will cut European spot crude sales by about 125,000 barrels per day (bpd) from Nov. 1 and trim 55,000 bpd off supply to domestic refiners, an Iranian official told Reuters on Monday.

However Indonesia, the group's second-smallest producer, said on Monday it would not cut output, which has already fallen well below its OPEC quota.

Investor confidence in producer cuts has been dampened by preliminary data for October that showed a slight rise in OPEC output, despite pledges that month to voluntarily cut back from Venezuela and Nigeria.

Nigerian unions on Monday threatened to shut all oilfields from Tuesday operated by Italian oil company Agip, which produces 200,000 bpd in the country, unless it paid staff a security bonus reflecting the rising risks of working in the Niger Delta.

Dozens of oil workers have been kidnapped this year in a rising wave of attacks that have forced Royal Dutch Shell to reduce output in the delta by 500,000 bpd since February.

Industry sources said exports from Saudi Arabia continued unaffected after a threat to the kingdom's oil facilities, easing concerns that boosted oil prices last week and prompted U.S.-led Gulf coalition forces to protect its top offshore oil terminal.

Prices have also eased as forecasts for temperatures in the U.S.

northeast, the world's top heating oil consuming region, are for a return to seasonal norms later this week, after an early cold spell that was seen pushing down fuel stocks last week.

Traders are looking for further direction on demand from U.S.

inventory data due on Wednesday, expected to show a 2.6 million barrel rise in crude after imports returned to normal following a temporary closure of the nation's biggest oil port.

Implied oil demand in the world's second largest consumer China rose a modest 3 percent in September from a year ago, the slowest pace since a contraction in January.

REUTERS PKS SSC1258 .40 drop.

Prices slid as fund investors moved money into other commodities, with gold prices hitting a seven-week high and zinc in London touching a record on Monday.

Traders are waiting to see if OPEC producers will adhere to an agreement earlier this month to cut supplies, which may take until the end of November or December as crude from the Middle East takes weeks to arrive in the United States.

''The dominant speculative sentiment remains overwhelmingly bearish,'' said Barclays Capital. ''Those on the short side who are expecting global economic weakness...and weak OPEC cohesion are unlikely to change those core views in a hurry.'' Saudi Arabia and the United Arab Emirates have told customers of supply cuts, but refiners who buy from other OPEC producers such as Kuwait and Libya say they have yet to receive notification of cuts.

Iran will cut European spot crude sales by about 125,000 barrels per day (bpd) from Nov. 1 and trim 55,000 bpd off supply to domestic refiners, an Iranian official told Reuters on Monday.

However Indonesia, the group's second-smallest producer, said on Monday it would not cut output, which has already fallen well below its OPEC quota.

Investor confidence in producer cuts has been dampened by preliminary data for October that showed a slight rise in OPEC output, despite pledges that month to voluntarily cut back from Venezuela and Nigeria.

Nigerian unions on Monday threatened to shut all oilfields from Tuesday operated by Italian oil company Agip, which produces 200,000 bpd in the country, unless it paid staff a security bonus reflecting the rising risks of working in the Niger Delta.

Dozens of oil workers have been kidnapped this year in a rising wave of attacks that have forced Royal Dutch Shell to reduce output in the delta by 500,000 bpd since February.

Industry sources said exports from Saudi Arabia continued unaffected after a threat to the kingdom's oil facilities, easing concerns that boosted oil prices last week and prompted U.S.-led Gulf coalition forces to protect its top offshore oil terminal.

Prices have also eased as forecasts for temperatures in the U.S.

northeast, the world's top heating oil consuming region, are for a return to seasonal norms later this week, after an early cold spell that was seen pushing down fuel stocks last week.

Traders are looking for further direction on demand from U.S.

inventory data due on Wednesday, expected to show a 2.6 million barrel rise in crude after imports returned to normal following a temporary closure of the nation's biggest oil port.

Implied oil demand in the world's second largest consumer China rose a modest 3 percent in September from a year ago, the slowest pace since a contraction in January.

REUTERS PKS SSC1258