(Recasts lead, updates prices paras 3 and 5)
By Felicia Loo
SINGAPORE, Jan 18 (Reuters) - Oil fell below $90 a barrel
on Friday to around a one-month low, as bleak economic data
heightened fears the United States would slip into a recession,
hurting demand from the world's biggest oil consumer.
Burgeoning U.S. oil stocks, coupled with warmer weather in
North America, also dampened prices.
U.S. light crude for February delivery <CLc1> shaved off 12
cents to $90.01 a barrel by 0703 GMT, after earlier hitting
$89.61, matching the level struck on Dec. 18, and extending
losses of 71 cents on Thursday.
Oil has tumbled about 10 percent from its record-high of
$100.09 a barrel reached on Jan. 3, taking pressure off oil
cartel OPEC to boost output at its next meeting in February.
London Brent crude <LCOc1> edged up 15 cents to $88.90 a
barrel, having lost 75 cents the previous day.
"There are concerns about the U.S. economic outlook. There
are other factors -- the weather conditions in North America
are warm and there has been no significant demand for heating
purposes," said Gerard Burg, analyst of National Australian
Bank.
He said peak refinery maintenance in the United States
would also hit crude oil demand.
Factory activity in the U.S. Mid-Atlantic region contracted
sharply in January and home building last month fell to the
slowest pace since the early 1990s, government reports showed
on Thursday.
Further stoking recession worries was the plunge in the
Philadelphia Fed's manufacturing index, to negative 20.9 in
January from minus 1.6 in December.
Federal Reserve Chairman Ben Bernanke said Thursday more
interest rate cuts may be necessary to counter the worsening
economic outlook, but said the Fed has not forecast a
recession.
Oil contracts had earlier risen more than a dollar on
Thursday, after Israel carried out a missile test, raising
speculation it is developing a deterrent to Iran.
The February contract may see some short-covering and
liquidation ahead of its expiry on Tuesday. NYMEX and other
U.S. financial markets are closed on Monday to observe the
Martin Luther King holiday.
AMPLE STOCKS
U.S. heating oil stocks were up 200,000 barrels last week,
to 36.3 million barrels, due to above-normal temperatures in
the U.S. Northeast, government data showed, adding to the
softer market.
Crude stockpiles in the U.S. climbed 4.3 million barrels to
287.1 million barrels due to a gush in imports and the arrival
of the refinery maintenance season.
OPEC reacted coolly this week to a call from U.S. President
George W. Bush for more oil output to bring down prices and
ease strain on the economy.
OPEC President Chakib Khelil said there was no reason why
the group should raise output at its meeting early next month,
if oil inventories recovered in the second quarter, when global
consumption normally tends to slow.
(Editing by Ramthan Hussain)
