UPDATE 2-Oil falls over $1, demand worries trump OPEC

                                
 * Oil falls over $1 to around $71
                                
 * OPEC says action needed to avoid huge oil glut
                                
 * U.S. data may show increase in crude, gasoline stocks
                                
 By Fayen Wong
                                
 PERTH, Oct 22 (Reuters) - Oil fell over $1 to around $71 a
barrel on Wednesday, extending a 4 percent slide in the
previous session, on mounting worries that output cuts by OPEC
will not be enough to offset slackening energy demand in
leading consumers.
                                
 Expectations that a report from the U.S. Energy Information
Administration, due for release on Wednesday at 1435 GMT, would
show a rise in crude stocks and product inventories also
weighed on oil prices.
                                
 U.S. crude for December delivery <CLc1> was down $1.05 at
$71.13 by 0239 GMT. November crude <CLX8> expired and settled
down $3.36, or 4.5 percent, at $70.89 on Tuesday, wiping all of
Monday's gains. London Brent crude <LCOc1> fell 87 cents to
$68.85.
                                
 "Concerns over weakening oil demand have dampened the oil
price, even though the OPEC meeting is expected to lower
production targets," David Moore, commodities strategist from
the Commonwealth Bank of Australia, said in a morning note.
                                
 The slide occurred as Asian stocks fell on Wednesday,
tracking losses in U.S. markets on concerns that corporate
earnings could be hit by slower consumer demand [ID:nN21302363]
and that the global economy might be sliding towards recession.
                                
 Japan's benchmark Nikkei average <.N225> was down 2.8
percent, Australia's S&P/ASX 200 <.AXJO> down 2 percent and
Hong Kong's Hang Seng <.HSI> opened down 1.1 percent.
                                
 INVENTORY OUTLOOK
                                
 The price of oil has slid 50 percent since hitting a record
high above $147 in mid-July. It briefly touched a 16-month low
of $68.57 last week on worries that the financial crisis would
slash energy demand in the United States, the world's largest
energy consumer, and other industrial countries.
                                
 A Reuters poll of U.S. inventory data due out later on
Wednesday calls for crude oil to show a 2.6 million barrel
build. Also forecast is a 100,000 increase in distillates and a
2.8 million barrel build in gasoline stocks. [EIA/S]
                                
 U.S. weekly retail gasoline demand to Oct. 17 fell 6.4
percent year-on-year, Mastercard Advisors said Tuesday, though
it rose compared with the previous week. [ID:nN21304017]
                                
 The Organization of the Petroleum Exporting Countries
(OPEC) was due to meet in Vienna on Friday and is expected to
reduce output to defend prices and temper the effects of the
financial crisis.
                                
 OPEC Secretary General Abdullah al-Badri has led the call
for output cuts, telling reporters on Tuesday that the world
would face a huge oversupply of oil next year, if leading
producers failed to cut supply. [ID:nLL494228]
                                
 Though oil prices staged a strong rally earlier this week
on expectations that OPEC would make significant cut to output,
fears of a global recession have returned to haunt commodities.
                                
 The current U.S. economic downturn could be worse than the
1990-91 recession, with growth restrained for as long as one to
three years, a top Federal Reserve policy-maker said on
Tuesday. [ID:nN21335219]
 (Additional reporting by James Topham in Tokyo; Editing by
Sambit Mohanty and Ben Tan)