* Oil falls to 16-month low below $67 a barrel
* U.S. data shows big rise in gasoline stocks, demand drop
* Recession fears hit markets
(Updates prices, CRB low)
By Chris Baldwin
NEW YORK, Oct 22 (Reuters) - Oil dropped more than 7
percent, on Wednesday, touching a new 16-month low as rising
U.S. fuel inventories added to signs a global economic slowdown
has dragged down demand.
Stocks, currencies, oil and commodities tumbled on
Wednesday and governments from Budapest to Buenos Aires
resorted to emergency action to rescue their economies from the
worst financial crisis in 80 years. []
U.S. crude <CLc1> settled down $5.43 at $66.75 a barrel,
after earlier touching $66.20, its lowest since June 14, 2007.
London Brent crude <LCOc1> settled $5.20 lower at $64.52 a
barrel.
Oil has plunged more than 50 percent from its record high
above $147 in July as the financial crisis cuts energy demand
in top energy consumer the United States and other industrial
countries.
Data from the U.S. Energy Information Administration showed
U.S. product demand fell 8.5 percent over the four weeks ending
Oct. 17 compared with year-ago levels, while inventory levels
continued to swell. []
U.S. crude oil inventories rose 3.2 million barrels in the
week to Oct. 17, above analyst expectations for a 2.6 million
build. Distillate inventories leaped by 2.2 million barrels
while gasoline inventories rose by 2.7 million barrels.
"The numbers look bearish on virtually all fronts," said
Jim Ritterbusch of Ritterbusch & Associates. "The data
reinforces our bearish view and ups the probability of $62
crude," he said.
The U.S. dollar hit a two-year high against a basket of
currencies on Wednesday, pressuring commodities across the
board. The Reuters-Jefferies CRB index <.CRB>, a global
commodities benchmark, approached 4-1/4-year lows on growing
recession fears. []
OPEC PRESSURE
Gloom about the global economic outlook could limit the
impact of any oil supply cuts OPEC might agree at an emergency
meeting on Friday, and the group's president said output policy
would prove a difficult balancing act.
The cartel is under pressure to reduce output at the Vienna
meeting, with many OPEC ministers calling for a supply cut to
help balance the oil market. []
OPEC President Chakib Khelil said oil stocks are high and
some member countries are finding it hard to sell their oil.
[]
"There is excess of crude not able to be absorbed by the
market," Khelil told reporters. "If (Friday's) decision goes
too far, it will affect countries who are already affected by
economic crisis."
"If it doesn't go too far, then it will affect the
producers who might end up in the category of people affected
by the financial crisis," he added.
(Additional reporting by Fayen Wong and Jane Merriman; editing
by Marguerita Choy)
