U.S. industrial production climbs, but Japan's economy enters recession SAN FRANCISCO (MarketWatch) -- Crude-oil futures climbed past $58 a barrel Monday morning, rebounding after a drop of as much as 3% overnight, as a climb in U.S. industrial production eased fresh concerns over a global economic slowdown sparked by data showing the Japanese economy has fallen into recession. "Prices turned around after a positive industrial production reading exceeded expectations," John Kilduff, an analyst at MF Global, told clients in a note. But "the dour outlook for the economy, which has affected the global capital markets, continues to be a pile-driving force on energy markets." December crude futures climbed as high as $58.98 a barrel in electronic trading on Globex. It was up $1.04, or 1.9%, at $58.08 in early North American trade, recovering from a drop to a low of $55.29 overnight. On Friday, crude futures fell $1.20, or 2.1%, to close at $57.04 a barrel on the New York Mercantile Exchange. It finished 6.6% lower for the week. Output of the nation's factories, mines and utilities partially rebounded in October from September's sharp weather-related slump, the Federal Reserve reported Monday. Industrial production increased 1.3% in October after falling a revised 3.7% in September, which was the biggest decline in 60 years. Massive hurricanes in the Gulf had shut down oil drilling, oil refining and chemical production in September, the Fed said. See full story. But in Japan, the economy shrank in the third quarter, marking its second straight quarterly contraction and sending the nation into its first recession since 2001. See related story. Its gross domestic product fell 0.1% in the July-to-September period from the previous quarter, or an annualized 0.4%, according to figures released Monday by the Cabinet Office. OPEC cuts estimates again Meanwhile, in its November report on the oil market, the Organization of the Petroleum Exporting Countries cut its estimates for oil demand this year and next. It revised lower its 2008 view by 260,000 barrels a day to show minor growth of 280,000 barrels a day. In 2009, it expects world oil demand to rise by more than 500,000 barrels a day, which is a downward revision of around 200,000 barrels. The fall in oil prices won't overcome the effects of the economic downturn, it said. "More and more economies are falling into recession, which highlights the severity of the global recession we face," analysts at Sucden Research said in a note. "For the oil market, the momentum is very much to the downside as demand continues to be hit in large consuming nations, and therefore we believe OPEC will have to act again sooner rather than later to bring the markets into balance in the short term," they said. In its monthly report, OPEC said it "stands ready" to take necessary decisions to support oil market stability. But OPEC President Chakib Khelil said Sunday that the oil cartel may have to wait until December to take action to reach an oil price of $70 to $90 a barrel, since the impact of its latest supply cuts was not clear yet, according to a Reuters report. Khelil said that OPEC's emergency meeting in November would be a brainstorming session at which recommendations may be formulated for the December meeting, the report said. Also on the Globex Monday, December reformulated gasoline rose 2.3 cents to $1.2625 a gallon, and December heating oil was at $1.875 a gallon, up 4.3 cents. December natural gas futures rose 17.3 cents, or 2.7%, to $6.484 per million British thermal units. Elsewhere in commodities, gold futures edged lower after gaining more than $37 Friday. See Metal Stocks. The Reuters/Jefferies CRB Index , a benchmark gauging the prices of major commodities, was at 246 points, down 0.6%.

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