LONDON (Reuters) - Oil rose toward $47 a barrel on Monday, reversing earlier losses of more a than a dollar on the perception that supply cuts by OPEC oil producers are beginning to put a floor under prices.
U.S. light crude for March delivery rose 33 cents to $46.80 a barrel by 1109 GMT. The contract rose $2.80, or 6.41 percent, to $46.47 a barrel on Friday, crowning a rebound in the front-month contract from below $33 a barrel a week ago.
London Brent crude rose 39 cents to $48.76 a barrel.
"The OPEC cuts are not sufficient to cause prices to move up, but they are enough to stabilize the market until demand begins to recover," Christopher Bellew, broker at Bache Commodities in London, said.
"Essentially the market is range-bound between $40 and $50, basis Brent," he said.
The main driver of a $2 rally in oil prices on Friday was evidence of OPEC making good on most of its pledged 2.2 million barrel a day (bpd) production cut this month.
Oil consultant Petrologistics estimated OPEC output would fall by 1.55 million barrels per day in January.
OPEC has pledged to cut output by a total of 4.2 million barrels per day since September to try to halt a more than $100 fall in oil prices since July.
These supply cuts are starting to have some impact, but the fragile state of the global economy and weak energy demand is preventing any sustained rally in the oil market.
An International Monetary Fund official said on Sunday the agency would cut its 2009 global growth forecast again, this time to between 1-1.5 percent from a previous estimate of 2.2 percent, as economic conditions deteriorate.
Oil demand is closely tied to economic growth and many economists now predict a fall in energy use this year as recession hits most of the large developed economies.
Crude oil speculators on the New York Mercantile Exchange trimmed new long positions in the week to January 20, according to U.S. Commodity Futures Trading Commission data.
(Reporting by Peg Mackey, Christopher Johnson and Jane Merriman in London and Fayen Wong in Perth; editing by Anthony Barker and Sue Thomas)
