* Oil below $66 a barrel, at new 16-month lows
* OPEC meets, analysts expect 1-1.5 million bpd cut
* European, Asian stock markets tumble
(Recasts, adds analyst comment, upates prices, previous
PERTH)
LONDON, Oct 24 (Reuters) - Oil fell below $66 a barrel on
Friday, to new 16-month lows, pressured by gloom across all
markets about a global economic downturn that could reduce the
impact of any cut in oil output from OPEC.
Ministers of the Organization of the Petroleum Exporting
Countries began an emergency meeting in Vienna on Friday that
could decide to reduce output by at least a million barrels.
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U.S. light crude for December delivery <CLc1> was down $2.68
at $65.16 a barrel by 0844 GMT, erasing earlier gains.
London Brent crude <LCOc1> was down $2.56 at $63.36.
"We believe this week will mark the start of a new quota
reduction cycle by OPEC and it will continue through 2009,"
Deutsche Bank analyst Michael Lewis said in a note.
"However, we believe production cuts will not rescue the oil
price," he said. "We target WTI (U.S.) crude oil prices hitting
$50 a barrel next year."
Oil has plunged more than 50 percent from its record high
above $147 in July, as demand has dropped in the United States,
the world's biggest energy consumer and other industrial
countries.
OPEC ministers have agreed the oil market is oversupplied,
but there are differences over the size of a potential cut.
The group is considering two supply cut options: a 1 million
barrel per day cut now and a review of this in December, or an
immediate cut of 1.5 million bpd, an OPEC delegate told Reuters.
Analysts polled by Reuters anticipate OPEC will reduce
output by between 1 million and 1.5 million barrels per day.
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Investor pessimism about the world economy was highlighted
by sharp falls in European and Asian stocks, led by around a 10
percent drop in Japan's Nikkei average <>.
Even gold, a traditional safe haven, was down 4 percent as
the U.S. dollar rose.
Bleak outlooks from world car makers and a barrage of job
cuts by major U.S. companies has provided evidence the financial
crisis is spilling over into the real economy.
"If it wasn't for an expected OPEC cut, there is a strong
possibility that oil prices would be falling a lot more
considering how poorly Asian stocks are performing," said David
Moore, a commodities strategist at the Commonwealth Bank of
Australia.
(Reporting by Jane Merriman in London and Fayen Wong in Perth,
editing by Anthony Barker)
