* Oil falls more than $4 a barrel
* OPEC agrees 1.5 mpbd cut
* Global stock markets tumble
(New throughout, updates prices, adds analyst comment, global
markets performance, U.S. oil products demand)
NEW YORK, Oct 24 (Reuters) - Oil dropped more than $4 a
barrel on Friday as gloom about a global economic downturn
sapping fuel demand took the steam out of an OPEC agreement to
cut output.
Ministers of the Organization of the Petroleum Exporting
Countries agreed at an emergency meeting in Vienna to take 1.5
million barrels a day of crude, about 5 percent of its supply,
off the world market.[]
U.S. light crude for December delivery <CLc1> traded down
$4.20 at $63.64 a barrel by 2:05 p.m. EDT (1805 GMT). It fell
as low as $62.65, its lowest since May 2007.
It has fallen more than $40 a barrel in a month.
London Brent crude <LCOc1> was down $4.40 at $61.52.
Saudia Arabia's Oil Minister Ali al-Naimi said the group had
agreed the output reduction with effect from Nov.1.
Traders said OPEC's action might not be enough to arrest a
slide that has seen oil down more than 50 percent from a record
$147 a barrel in July.
"Already we've seen demand destruction of 2 million barrels
per day. I'm not convinced this cut will be enough to stop the
slide," said Rob Laughlin, at broker MF Global.
The U.S. Energy Information Administration said this week
that oil products demand in the world's biggest energy consumer
during the previous four weeks was 18.7 million barrels per
day, down 8.5 percent from a year ago.
NERVOUS MARKETS
Oil has plunged as the credit crisis hits economic growth
and fuel demand in the United States and other industrial
countries.
"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."
The International Energy Agency, which advises
industrialized consumer countries, was critical of OPEC's cut.
"It's not a helpful decision because markets are quite
nervous," Eduardo Lopez, senior analyst at the IEA's oil market
division said.
Investors across financial markets are pessimistic about
the world economy, illustrated by sharp falls in global stocks
on Friday, led by the lowest close in European shares in five
and a half years [].
"OPEC actions notwithstanding, the market is clearly being
influenced more by the apocalyptic psychology currently
pervading all markets," said Mike Fitzpatrick, vice president
at MF Global in New York.
Even gold, a traditional safe haven, fell nearly 5 percent
at one stage, pressured by a surge in the U.S. dollar as
investors moved into cash.
(Additional reporting by David Sheppard in London, Fayen Wong
in Perth, and Timothy Gardner and Gene Ramos in New York;
Editing by David Gregorio)
