* Asian stock markets fall, dollar gains against yen
* U.S. and Japanese data points to deepening global
recession
* U.S. distillate demand falls to 5-year low
(Changes headline, releads, updates prices, adds comment)
By Fayen Wong
PERTH, Jan 15 (Reuters) - Oil fell $1 on Thursday to near
$36 a barrel, extending an overnight decline as grim data from
the world's major economies and the return of a banking crisis
further darkened the global energy demand outlook.
Asian shares followed their U.S. counterparts down, hitting
a 5-week low as weak U.S. retail sales data overnight was
followed by a record fall in Japanese machinery orders, while
continued strength in the dollar against the euro also weighed
on crude.
U.S. light crude for February delivery <CLc1> was down 88
cents at $36.41 a barrel by 0500 GMT, after having fallen by as
much as $1.15.
London Brent crude <LCOc1> fell 73 cents to $44.35 a
barrel.
"The bad economic news has continued to pour in and
concerns about demand destruction are exerting a lot of
downward pressure on oil," said Victor Shum, an analyst at
Purvin & Gertz in Singapore.
The U.S. Commerce Department said on Wednesday that total
retail sales fell 2.7 percent last month. []
Other countries' indicators are also showing signs of
trouble, with core Japanese private-sector machinery orders
falling a record 16.2 percent in November [], the
German economy contracting sharply in the final quarter of 2008
and euro zone industrial output plunging in November.
[]
Slowing economic growth means less need for oil, a link
confirmed by figures showing U.S. distillate demand fell to the
lowest level in five years, causing stocks to surge by 6.4
million barrels in the week to Jan. 9. []
Crude stocks also rose for the third consecutive week, by
1.2 million barrels to 326.6 million barrels, according to the
Energy Information Administration.
Supplies at the NYMEX delivery point in Cushing, Oklahoma,
were up 800,000 barrels at 33 million barrels, a record storage
level at the site.
Analysts said oil traders will be looking towards U.S.
economic indicators due out later on Thursday, including weekly
jobless claims and monthly producer price changes, to gauge how
the economy is faring. []
Renewed doubts about Citigroup <C.N> and Bank of America
<BAC.N> over their ability to fund their massive losses have
revived jitters and suggested that the worst of the financial
crisis was not yet over. []
Oil prices have toppled from record highs over $147 a
barrel struck in July as the economic crisis clips global oil
demand, with the EIA now forecasting world consumption will
drop by more than 800,000 barrels per day (bpd) this year.
"The key supporting factor continues to be OPEC cuts and
until we see a clearer picture of compliance and some signs of
economic recovery, the outlook for oil remains rather bleak,"
said Shum
With recent supply cuts by producer group OPEC having had
little success in propping up collapsing oil prices, several
members, including top exporter Saudi Arabia, have said that
the group may reduce output again in March.
(Reporting by Fayen Wong; Editing by Michael Urquhart)
