* Oil falls after two sessions of gains
* U.S. consumer confidence at record low in December
* OPEC output set to fall further in December
(Updates prices, adds detail throughout, updates timeline from
previous, LONDON)
By Edward McAllister
NEW YORK, Dec 30 (Reuters) - Oil fell over 3 percent on
Tuesday, as signs of the sickly world economy outweighed
tension in the Middle East due to the Israeli-Hamas conflict.
The fall came with a raft of demand-destructive news,
including signs that the U.S. holiday shopping season was the
weakest since 1970 and consumer confidence in the world's
largest energy user was at record lows in December.
U.S. crude <CLc1> was down $1.36 at $38.66 a barrel by
11.44 a.m. EST (1644 GMT), having earlier touched a session
high of $40.39.
London Brent <LCOc1> fell $1.12 cents to $39.43.
"Concerns over the state of the global economy eclipses
fears that the conflict between Israel and Hamas will inflame
tensions in the Middle East," Addison Armstrong, analyst at
Tradition Energy, wrote in a note.
Oil prices had jumped as much as 12 percent on Monday after
Israel launched its fiercest air offensive in the Hamas-ruled
Gaza strip in decades. []
U.S. consumer confidence fell to a record low in December
as the worst job market in 16 years hammered sentiment, the
U.S. Conference Board said on Tuesday. []
The U.S. shopping season was the worst since at least 1970
due to the recession, according to the ICSC-Goldman Sachs
Weekly Chain Store Sales index, released Tuesday.
[]
Prices of U.S. single-family homes in October fell a record
18 percent from a year earlier, according to the Standard &
Poor's/Case-Shiller Home Price Indices released Tuesday, a
further indication of deep recession. []
"This market is driven by expectations. With home prices
plunging and consumer sentiment plunging, the outlook for
energy demand and prices can only reflect that," said John
Kilduff, senior vice president at MF Global in New York.
South Korea's November factory output fell over 10 percent
in November from October, amid fears that Asia's fourth-largest
economy is slipping into a recession. []
Oil has dropped more than $100 from a record peak above
$147 a barrel in July, with the recession denting demand in
large consumer nations.
The Organization of the Petroleum Exporting Countries has
agreed its biggest-ever production cut of 2.2 million barrels
per day (bpd) to fight the oil market slide.
The group has cut output three times in an effort to remove
about 5 percent of world supply.
OPEC oil supply, excluding Iraq and Indonesia, is expected
to fall by 400,000 barrels per day in December as members boost
compliance with their deal to reduce output, consultant
Petrologistics said. []
The estimate indicates OPEC has more than delivered on its
pledge to lower supply from 11 members to 27.3 million barrels
per day from Nov. 1 to prop up prices.
A preliminary poll of analysts forecast that U.S. crude
stocks will have fallen by 1.4 million barrels last week, while
distillate inventories will have risen by 1 million barrels and
gasoline stocks increased by 1.5 million barrels. []
Weekly U.S. fuel inventory data is due on Wednesday.
(Additional reporting by Christopher Johnson and Jane Merriman
in London and Baizhen Chua in Singapore; Editing by Christian
Wiessner)
