* U.S. oil data on Wednesday likely to show crude stocks up
* Dollar falls against basket of currencies
* U.S., Japanese stocks drop
* OPEC may call emergency meeting if oil prices keep falling
(Updates prices, detail)
By Christopher Johnson
LONDON, Dec 24 (Reuters) - Oil fell towards $38 a barrel on
Wednesday on expectations that deepening global recession would
reduce oil demand.
Sharp falls in the world's stock markets and a stream of
bearish economic data kept oil prices near 4-1/2-year lows ahead
of the Christmas and New Year holidays.
U.S. light crude for February delivery <CLc1> fell 94 cents
to a low of $38.04 a barrel before recovering a little to $38.12
by 1105 GMT.
London Brent crude <LCOc1> fell $1.10 to $39.26 a barrel.
Stock markets again set a bearish trend with the Dow Jones
industrial average <> closing down 1.2 percent and Japanese
equities following suit after a raft of negative economic data.
[] [].
"Oil prices continue to fall on the coat tails of equity
markets and the trend suggests this will continue into the New
Year," said Rob Laughlin, senior oil analyst at MF Global.
Oil prices have fallen about 60 percent since the start of
this year and tumbled more than 70 percent since their record
peak above $147 in July as demand from the United States, China,
Japan and other industrialised nations has fallen.
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The Organization of the Petroleum Exporting Countries (OPEC)
has already announced cuts of 5 percent in global oil supplies
and may call an emergency meeting before March if prices extend
their near $110-per-barrel slide since summer, OPEC's President
Chakib Khelil said on Tuesday. []
Oil was buoyed on Wednesday by a dip in the dollar, which
edged down against the yen, pressured by light selling from
Japanese exporters after dismal U.S. growth and housing data
suggested a prolonged recession ahead.
The euro also rose versus the dollar on cooling expectations
for a euro zone interest rate cut in January. []
But forecasts that U.S. government data would show a build
in crude stocks for the third-straight week by 400,000 barrels
weighed on prices. []
Data due later on Wednesday is also expected to show
distillate stocks rose 200,000 barrels last week, while gasoline
is seen up 500,000 barrels, a Reuters poll showed.
U.S. government data on Tuesday showed the world's largest
economy shrank 0.5 percent in the third quarter as a credit and
housing crisis took hold. Consumer spending plunged 3.8 percent,
the deepest fall since 1980. []
The UK economy shrank 0.6 percent in the third quarter, its
first decline since the early 1990s, and data also showed
recessions taking root in Spain and New Zealand. []
The U.S. Energy Information Administration expects world oil
demand to shrink in 2008 and 2009 due to the financial turmoil,
marking the first declines since 1983.
(Additional reporting by Fayen Wong in Perth; editing by James
Jukwey)
