* Eastern Europe triggers new bank fears
* U.S. stocks tumble on stimulus concerns
* Obama to sign stimulus bill on Tuesday
(Updates throughout, changes dateline from LONDON)
NEW YORK, Feb 17 (Reuters) - U.S. oil prices fell more than
7 percent to below $35 a barrel on Tuesday as grim economic
indicators battered markets and raised concerns about slumping
demand.
A new report suggesting eastern Europe's economic slump
will drag Western banks further into the red fanned fears on
Tuesday that emerging economies will deepen the recession in
the West. []
Japan, a big oil consumer, has suffered a sharper
contraction than other major economies because of its heavy
dependence on exports combined with persistently soft domestic
demand. []
U.S. crude <CLc1> for March delivery fell $2.77 to $34.74 a
barrel by 11:43 a.m. EST (1643 GMT). London Brent crude <LCOc1>
for April delivery dropped $1.83 to $41.45 a barrel.
Much of the world has been pushed into recession by the
credit crisis, pushing down fuel demand and sending crude oil
prices from record highs over $147 a barrel in July.
"The economic outlook will continue to dominate the first
half of 2009. The United States, eurozone and Japan are in
synchronized recession," Harry Tchilinguirian, oil analyst at
BNP Paribas, said. "OPEC supply cuts are only going to impact
consuming country inventories with a lag."
Algerian Oil Minister Chakib Khelil reiterated that the
Organization of Petroleum Exporting Countries would be more
likely to cut oil production again in March, if prices remained
below $40 a barrel. []
Earlier, Iraq's oil minister, Hussain al-Shahristani, said
OPEC should look to further cuts in supply, if curbs to date
fail to balance the market. []
The producer group agreed to a series of deep output cuts
during the second half of 2008 in order to help counter the
drop in demand and prices.
U.S. stocks tumbled on fresh signs the economic recession
is worsening and worried that efforts to stabilize the
beleaguered financial system may not prove sufficient.
[]
U.S. President Barack Obama was due to sign a $787 billion
economic stimulus bill into law on Tuesday, but investors were
fearful that the measure would not help soften the impact of
the 14-month-old recession soon enough.
Factory activity in New York state fell to a record low in
February, with new orders and employment falling sharply as the
U.S. recession deepened, according to a survey. []
U.S. crude for March delivery, which expires on Friday, was
trading at a $4.30 discount to April crude due to high
inventories at the storage hub in Cushing, Oklahoma, the
delivery point for the U.S. futures contract.
Brimming U.S. stocks are also keeping U.S. crude at an
atypical discount to Brent crude.
Russia signed its biggest energy deal with China on
Tuesday, under which its oil firms will receive $25 billion in
loans in exchange for long-term crude supplies, a source close
to the talks told Reuters. []
(Reporting by Matthew Robinson, Robert Gibbons, and Gene
Ramos in New York; Alex Lawler and Chua Baizhen in London;
Editing by Walter Bagley)
