Oil flat after gains on OPEC's Feb output cut

SINGAPORE, Dec 15 (Reuters) Oil hovered unchanged above $62 a barrel on Friday as traders took pause from a more than $1 rally on OPEC's compromise deal to cut production from February.

Meeting in Abuja, Nigeria, on Thursday, OPEC settled on a second output cut of 500,000 barrels per day (bpd), on top of the 1.2 million bpd reduction agreed in October, but it opted to wait until after the peak of winter demand to implement the new curbs.

U.S. light, sweet crude was unchanged at $62.51 a barrel by 0200 GMT, having leapt $1.14 a barrel in a second day of gains on Thursday as OPEC's action proved more definitive than some traders had expected in the lead-up to the meeting, when some OPEC ministers said they saw no need for further action.

Analysts said OPEC's deal appeared to be a compromise between price hawks who feared swollen stockpiles could cause prices to slump in the second quarter and others who worried that an immediate cut could leave markets short at the height of winter, causing prices to spike and damaging the global economy.

With a Reuters survey showing OPEC only met about two-thirds of its initial cut-backs, some analysts doubted whether fresh limits would be effective in supporting prices that remain under pressure from U.S. inventories and mild winter weather.

''The last cut didn't work so well... I think basically even the 500,000 bpd cut is too small to sustain prices. Crude oil inventories are still high and it's quite easy to get material,'' said Tetsu Emori, strategist at Mitsui Bussan Futures.

U.S. crude oil stocks fell a sharper than expected 4.3 million barrels last week, but still stood at their highest since 1998 for this time of year.

Emori also said that OPEC's cuts were restoring some additional spare production capacity to the market, which has helped partly relieve concerns over supply disruptions.

Oil prices have hovered around the $60 a barrel mark for the past three months as OPEC's first cut helped arrest a steep 25 percent slide from a record-high $78.40 a barrel in July.

The upside for prices has been limited by expectations that normal to mild winter weather in the northern hemisphere will temper demand, especially in top consumer the United States.

Temperatures in the U.S. Northeast will be as much as 18 degrees Farenheit (9 Celsius) above normal at the weekend, according to DTN Meteorlogix.

REUTERS MQA ND1028