* U.S. consumer confidence at record low in December
* Saudi Arabia to deepen output cuts in February
* Foreign powers call for Israel-Hamas ceasefire
(Updates prices, comment)
By Christopher Johnson
LONDON, Dec 31 (Reuters) - Oil slid below $37 a barrel on
Wednesday, heading for a fall of more than 60 percent in 2008 as
the global economic slowdown bit deep into energy demand.
Crude oil hit an all-time high of more than $147 in July but
prices have collapsed in the last six months as the credit
crisis has pushed the industrialised world into recession.
Dismal data from the United States on Tuesday added to
pessimism that oil demand would suffer further in 2009,
countering any support from Middle East tensions and hopes for
another Saudi output cut.
Analysts forecast an average of $49 a barrel for U.S. crude
in the first quarter, and an average of $58.48 for next year,
down $14 from their previous forecasts, the latest Reuters poll
showed. []
U.S. crude oil futures for February <CLc1> dropped to a low
of $36.94 per barrel, down $2.09, before recovering slightly. By
1156 GMT, the contract stood at $37.07.
London Brent <LCOc1> dropped $2.05 cents to a low of $38.10
before rallying to $38.25 by 1156 GMT.
"We expect energy prices to remain on the defensive through
the early weeks of the New Year, presuming of course that the
fighting in the Middle East does not spill over into other
countries," MF Global said in a note to clients.
DETERIORATING ECONOMY
A dealer with a large U.S. broker agreed:
"The fundamentals of this oil market are horrible. Demand is
falling and there seems no reason to buy," he said. "There is
still plenty of room to go lower."
Oil jumped as much as 12 percent on Monday after Israel
launched its air offensive on Gaza but prices slipped back
quickly and analysts said they saw very little risk of the
conflict disrupting oil supplies from the Gulf.
Foreign powers have stepped up calls on the warring parties
to call an immediate ceasefire. []
The market focus is on the deteriorating economy.
The United States saw its worst job market in 16 years
hammer consumer confidence to a record low in December, the
shopping season was the worst since at least 1970, and prices of
U.S. single-family homes in October fell a record 18 percent
from a year earlier. [] []
U.S. retail gasoline demand for the week ending Dec. 26
dropped 3.8 percent from the same week a year ago, as drivers
tightened their belts over Christmas, a MasterCard survey
showed. []
Weekly U.S. inventory data due later on Wednesday will give
more clues on the impact on oil use.
A poll of analysts forecast U.S. crude stocks fell by 1.5
million barrels last week, while distillate inventories rose by
1.1 million and gasoline increased by 1.5 million. []
Top OPEC exporter Saudi Arabia is set to cut oil supplies
further in February, market sources said on Tuesday, potentially
taking output below its agreed OPEC target. []
With oil coming off more than $100 from its record peak
mid-year, the Organization of the Petroleum Exporting Countries
has announced its biggest-ever production cut of 2.2 million
barrels per day to fight the price slide.
The group already has cut output three times in an effort to
remove about 5 percent of world supply.
(Additional reporting by Chua Baizhen in Singapore; editing by
Anthony Barker)
