* OPEC cuts 2009 world oil demand forecast
* European Central Bank cuts rates
* U.S. distillate demand falls to 5-year low
(Adds OPEC demand cut, updates prices)
By Chris Baldwin
LONDON, Jan 15 (Reuters) - Oil fell towards $36 a barrel on
Thursday after gloom about the health of the world economy put a
cap on earlier modest gains.
The uncertain global economic outlook prompted OPEC to
forecast a fall of 180,000 barrels per day in world oil demand
this year, 30,000 bpd more than its previous forecast.
U.S. light crude for February delivery was down 50 cents at
$36.78 a barrel by 1355 GMT, after having fallen by as much as
$1.15 in early session trade.
Record stocks at Cushing, Oklahoma, the delivery point for
U.S. crude futures, have helped drive U.S. crude prices down
relative to Brent.
U.S. crude for February, for example, is currently at a
record discount to Brent of more than $10 a barrel.
London Brent crude for February rose $1.57 to $46.65 a
barrel, ahead of the contract's expiry later in the session.
"You had an oil market that got a boost at the beginning of
the year, partially on holiday consumption, partially on cold
weather...but now it's back on continuing dismal economic data,"
said Harry Tchilinguirian at BNP Paribas.
DIM OUTLOOK
Oil was $147 a barrel in July but has tumbled as the
economic crisis had clipped global oil demand.
The U.S. Energy Information Administration this week
forecast a world consumption drop of more than 800,000 barrels
per day (bpd) this year. []
The Organization of the Petroleum Exporting Countries has
also cut its forecast for 2009 world oil demand. []
"The considerable uncertainty about the course of the
recovery implies the potential for further deterioration in
world oil demand growth this year," OPEC said in its Monthly Oil
Market Report.
This could build a case for the producer group to cut output
again. OPEC has already reduced supply by about 4 million bpd
since September to try to halt the oil price slide.
The demand slowdown was illustrated by figures on Wednesday
that showed U.S. distillate fuel demand fell to the lowest level
in five years, causing inventories to surge by 6.4 million
barrels in the week to Jan. 9.
U.S. crude stocks also rose for the third consecutive week,
by 1.2 million barrels to 326.6 million barrels, according to
the EIA.
Stocks at Cushing, Oklahoma, were up 800,000 barrels at 33
million barrels, a record storage level at the site.
"An eye-popping 6 million barrel build in diesel at Cushing,
which is used in the U.S. for trucking, moving goods to stores,
and within the context of weak retail sales really shows the
economic slowdown with consumers not shopping," Tchilinguirian
said.
The European Central Bank cut interest rates by 50 basis
points to 2 percent, citing clear further evidence of a
significant slowing in the economy.
The number of U.S. workers filing new claims for
unemployment benefits rose last week, government data showed,
suggesting the U.S. recession is deepening.
(Additional reporting by Jane Merriman in London and Fayen Wong
in Perth; Editing by James Jukwey)
