Oil dips back below $61, looks toward IEA report

TOKYO, Nov 10 (Reuters) Oil backed down from a two-week high on Friday, dipping below a barrel and shedding sharp gains that followed an unexpectedly steep fall in U.S. fuel stocks and more talk of further supply cuts from OPEC.

U.S. light, sweet crude for December slipped 34 cents to .82 a barrel by 0811 GMT, eroding part of Thursday's more than 2 percent gains. London Brent crude fell 36 cents to .96 a barrel.

Oil traders were taking profits ahead of the International Energy Agency's monthly report, which will give an update on how prices are affecting global demand.

Prices rallied to their highest in two weeks on Thursday, extending gains after U.S. weekly data showed a 2.7 million-barrel fall in distillate stocks, stirring concerns over heating fuel supplies as the northern hemisphere heads into winter.

Government and private forecasters project the U.S.

Northeast, the biggest heating oil consuming region, will have either normal or colder-than-normal weather into January.

The market also firmed up after Saudi Arabia and other Gulf OPEC members said this week they saw scope for further supply cuts when the producer group next meets on Dec. 14.

Gulf members of the Organization of the Petroleum Exporting Countries said on Wednesday they were fully committed to the 1.2 million barrels per day (bpd) cut agreed from November, but said markets remained oversupplied for now.

With little else to focus on, dealers were looking ahead to the IEA's monthly oil market report due later on Friday.

''If the 2007 global oil demand growth is revised up, prices may jump,'' said Tetsu Emori, chief strategist at Mitsui Bussan Futures Ltd. in Tokyo.

The Paris-based agency last month trimmed its 2007 global oil demand growth forecast by 90,000 bpd to 1.45 million bpd because of slightly weaker U.S. demand.

REUTERS PKS HS1350