* Growing concerns of global recession weigh
* US data shows large increases in crude, gasoline stocks
* Total U.S. product demand sinks 8.9 pct
(Updates prices, adds stock market data)
By Rebekah Kebede
NEW YORK, Oct 16 (Reuters) - Oil fell more than 6 percent
to below $70 a barrel on Thursday, touching a 15-month low on
rising U.S. inventories and concerns a possible recession would
slow demand further.
The Dow Jones industrial average and the S&P 500 slipped in
a choppy session on Thursday as major U.S. banks reported huge
losses and other companies painted a grim outlook for the
battered U.S. economy. []
U.S. crude <CLc1> settled at $69.85, down $4.69, after
sliding to as low as $68.57, the lowest level since June 27,
2007.
In London, front month November Brent crude <LCOX8>, which
expires on Thursday, settled at $66.32, down $4.48.
"It's still a demand story, we're moving lower following
the report," said Amanda Kurzendoerfer, commodities analyst at
Summit Energy in Louisville, Kentucky.
"We saw some very large builds in gasoline and crude oil
for the second week in a row. This confirms the fact that
demand is truly weakening in the United States," she added.
Crude oil inventories in the United States rose 5.6 million
barrels last week, far exceeding analysts' expectation of a
1.9-million-barrel increase, as demand in the world's top
consumer continued to fall, the U.S. Energy Information
Administration reported. []
Gasoline inventories rose 7.0 million barrels, more than
double analysts' forecast of a 2.9-million-barrel increase, as
overall product demand over the past four weeks dropped 8.9
percent from year ago levels.
U.S. crude has fallen from record highs above $147 hit in
July, and has dropped nearly a third in value in three weeks,
the steepest such decline since it began trading in 1983 amid
the mounting threat of a global recession.
Data from the Federal Reserve showed U.S. industrial
production posted the biggest monthly decline since 1974.
[]
"Economic weakness is hitting the stock and oil markets,
but the oil price fall is also reflecting a lack of demand. It
is very difficult to buy oil if you are having a hard time
getting credit lined up," said Francisco Blanch, head of
commodity research at Merrill Lynch.
Analysts have scaled back global oil demand growth
estimates after a slew of gloomy economic data that suggest the
credit crisis has begun to undermine economic growth in the
United States, the world's top energy consumer.
OPEC
The Organization of the Petroleum Exporting Countries
(OPEC) said on Thursday it had brought forward to Friday next
week an emergency meeting to discuss the impact of global
recession on oil markets.
Pressure has been mounting within the 13-member group to
reduce supplies. There are expectations it may take action to
support prices.
Nigerian Oil Minister Odein Ajumogobia said the emergency
OPEC meeting was an opportunity to consider options regarding
the world oil price but that no course of action had yet been
proposed.
"I regard it as an exploratory meeting to review facts and
options. Not even tentative proposals have been discussed at
this stage," Ajumogobia told Reuters.
Hurricane Omar weakened rapidly as it surged into the
Atlantic on Thursday, after threading its way through the small
islands of the northeastern Caribbean as a fiercely powerful
storm that ended up causing relatively little damage, U.S.
forecasters said. []
(Additional reporting by Joe Brock, Jane Merriman and Ikuko
Kao in London; Editing by Christian Wiessner)
