Oil fell $1 on Friday to below $46 as the stock market dropped and traders awaited OPEC's meeting this weekend.

U.S. stocks fell in choppy trade as financial shares retreated and a drop in big-cap technology shares derailed Wall Street's attempt at a fourth straight day of gains.

U.S. light crude for April delivery fell $1.05 to $45.98 a barrel by 13.06 EDT. The contract jumped $4.70 on Thursday.

London Brent crude fell 83 cents to $44.26.

We're seeing a little bit of the stock market swaying oil futures again...You can see equities going down and we may see a test of crude's early lows here, said Gene Mcgillian, analyst, Tradition Energy, Stamford, Connecticut.

Oil prices have fallen $100 since record highs over $147 a barrel in July 2008 as the economic meltdown dented global energy demand.

OPEC meets Sunday in Vienna to discuss moves to deal with falling oil prices.

The producer group has already cut supplies by 4.2 million barrels per day since September and will decide whether to cut further or agree to stricter compliance with already-announced cuts.

Independent observers estimate that OPEC is currently adhering to about 80 percent of agreed cuts.

It might be that what we get in Vienna is talk of implementing full compliance of previous cuts before we get to the next one, to try and give the hard pressed economy of the world a respite, said Simon Wardell, director of global oil analysis and forecasting at IHS Global Insight.

Oil has hovered between $33 and $50 since the beginning of the year after OPEC implemented and began showing compliance to output cuts.

FURTHER CUTS?

OPEC released a report on Friday showing world oil demand contracting faster than expected, pressuring prices further.

OPEC said global demand would fall by 1.01 million bpd on 2009, revising its earlier forecast of a fall by 580,000 bpd.

However, the International Energy Agency said Friday that strict adherence to OPEC cuts already in place would be enough to shrink oil stocks in developed nations, even though demand is expected to contract further.

Our view it that they don't really need to do very much more in terms of new targets, said head of the oil industry and markets division David Fyfe of the Paris-based IEA.

OPEC seaborne oil exports, excluding Angola and Ecuador, will fall to a five-year low in the four weeks to March 28, to 22.76 bpd, down 350,000 bpd, UK consultancy Oil Movements said in its latest weekly estimate on Thursday.

(Additional reporting by Christopher Baldwin in London,Maryelle Demongeot in Singapore and Alex Lawler and Barbara Lewis in Vienna; Editing by David Gregorio)

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