* Eastern Europe triggers new Western bank fears
* U.S. stocks tumble on stimulus concerns
* Obama signs stimulus bill
(Updates throughout, adds settlement prices)
By Matthew Robinson
NEW YORK, Feb 17 (Reuters) - U.S. oil prices fell nearly 7
percent to below $35 a barrel on Tuesday as grim economic
indicators battered markets and raised concerns about slumping
demand.
Worries that Eastern Europe's hard-hit economies will drag
down Western banks undercut global markets and U.S. investors
braced as two of Detroit's Big Three automakers scrambled to
submit restructuring plans. []
U.S. crude <CLc1> for March delivery settled at $34.93 a
barrel, down $2.58 from Friday's close. Floor trade on the New
York Mercantile Exchange was shut on Monday for the U.S.
Presidents Day holiday, although there was electronic trade.
London Brent crude <LCOc1> for April delivery dropped $2.25
to settle at $41.03 a barrel.
The credit crisis has pushed much of the world into
recession, depressing fuel demand and sending crude oil prices
down sharply from record highs above $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. President Barack Obama signed a $787 billion economic
stimulus bill into law as global markets plunged on fears that
the recession would deepen despite government action in many
countries. []
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. []
"We are in the midst of a slow economy and staring at
near-record crude oil inventories, so it's hard to be bullish
at this point," said Phil Flynn, an analyst at Alaron Trading
in Chicago.
U.S. crude oil inventories have risen seven straight weeks,
raising commercial supplies to more than 350 million barrels as
of the week to Feb. 6, according to the most recent report from
the U.S. Energy Information Administration. []
U.S. crude for March delivery was trading at a steep
discount to April crude, which settled at $38.54, due to high
inventories at 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.
A Reuters poll of analysts ahead of weekly U.S. inventory
data forecast crude stocks rose by 2.6 million barrels in the
week to Feb. 13, while gasoline and distillate stocks fell.
[]
The forecasts were issued ahead of data to be released by
the American Petroleum Institute on Wednesday and by the U.S.
Energy Information Administration on Thursday. Both reports
were delayed a day by the U.S. holiday.
(Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York; Alex Lawler in London and Chua Baizhen in
Singapore; Editing by Walter Bagley)
