* U.S. Fed decides against rate rise
* European, U.S. stocks fall sharply
* Brent set for first weekly gain in three weeks
(Updates shares, oil prices)
By Karolin Schaps
LONDON, Sept 18 (Reuters) - Oil prices fell on Friday after
the U.S. central bank warned on the health of the global economy
and bearish signs persisted that the world's biggest crude
producers would keep pumping at high levels.
The Federal Reserve decided against raising interest rates
from historic lows on Thursday, saying uncertainty about global
economic growth had forced its hand. ID:nL1N11N244
The bearish sentiment sent European and U.S. stock markets
sharply lower on Friday, with Frankfurt's Dax .GDAXI down more
than 3 percent and the U.S. S&P 500 index .SPX down 1.15
percent at 1338 GMT.
The oil market had mixed reactions to the Fed decision, with
concerns about economic weakness sending commodities lower, but
a fall in the U.S. currency also meant buying dollar-traded
crude became cheaper.
"The perception of 'ZIRP (Zero Interest Rate Policy)
forever' should provide some underlying support to the commodity
complex," said Olivier Jakob, a strategist at Petromatrix, a
Swiss-based consultancy.
Brent crude LCOc1 was down 80 cents at $48.28 a barrel at
1340 GMT, after touching an intraday high of $49.75. U.S. West
Texas Intermediate (WTI) crude futures CLc1 were trading down
$1.55, or 3.3 percent, at $45.35 a barrel.
Brent was set to make its first weekly gain in three weeks,
hinting at a turn in momentum for a commodity that has declined
nearly 30 percent since spring.
Kuwait, a member of the Organization of the Petroleum
Exporting Countries (OPEC), said on Thursday the oil market
would balance itself but that this would take time, indicating
support for the group's policy of defending market share despite
falling prices. ID:nL5N11N20S
Other sources at OPEC backed this view, saying they expected
oil prices to rise by no more than $5 a barrel per year to reach
$80 by 2020, with a slowing in rival non-OPEC production growth
not enough to absorb the current oil glut. ID:nL5N11N49W
Iran's deputy oil minister Rokneddin Javadi was quoted as
saying the country would unveil new oil contracts in the coming
weeks, earlier than previously expected. ID:nL5N11O15S
The prospect of sanctions-free Iran adding more barrels to
an already oversupplied market is fuelling bearish momentum.
Javadi also reiterated Iran's plans to regain its oil production
share once Western sanctions are removed.
Russia acknowledged for the first time on Friday it would
cut production if oil prices fall below $40 a barrel, floating
the possibility that one of the biggest oil producers may resort
to proactive measures to prop up prices. ID:nL5N11O1KN