* Oil steadies below $39, set for 60 percent drop this year
* U.S. consumer confidence at record low in December
* Saudi to deepen output cuts in February
* Foreign powers call for Israel-Hamas ceasefire
SINGAPORE, Dec 31 (Reuters) - Oil was little changed on
Wednesday, closing out its worst year ever after falling 60
percent, with a rapid reversal in the economic outlook having
brought it crashing back from a mid-year record high.
Crude steadied below $39 as Middle East tension and hopes
for another Saudi output cut did little to counter the grim
economic outlook.
Fresh sets of dismal data from the United States on Tuesday
added pessimism that oil demand in 2009 will suffer further,
with analysts cutting their price forecasts.
Analysts forecast an average of $49 a barrel for U.S. crude in
the first quarter, and an average $58.48 for next year, down
$14 from their previous forecasts, the latest Reuters poll
showed. []
By 0212 GMT, U.S. crude <CLc1> fell 28 cents to $38.75 a
barrel, while London Brent <LCOc1> dropped 20 cents to $39.95.
"Basically, the situation globally is much worse than
expected. It's all very pessimistic numbers," said Tetsu Emori,
a fund manager at Astmax Co Ltd in Japan.
The United States saw its worst job market in 16 years
hammer consumer confidence to a record low in December, the
shopping season was the worst since at least 1970, and prices
of U.S. single-family homes in October fell a record 18 percent
from a year earlier. [] []
"I'm pessimistic about next year. I think recovery will be
seen later in 2010 or early 2011," Emori said.
On the roads, U.S. retail gasoline demand for the week
ending Dec. 26 dropped 3.8 percent from the same week a year
ago as drivers tightened their belts over Christmas, a
MasterCard survey showed. []
Weekly U.S. inventory data due later in the day will give
more clues on the impact on oil use.
An updated poll of analysts forecast that U.S. crude stocks
fell by 1.5 million barrels last week, while distillate
inventories rose by 1.1 million barrels and gasoline stocks
increased by 1.5 million barrels. []
Support for oil prices from the Israel-Hamas conflict
waned, even as the Palestinian death toll continued to mount.
Foreign powers have stepped up calls on the two warring parties
for an immediate ceasefire. []
Oil prices jumped as much as 12 percent on Monday after
Israel launched its fiercest air offensive in Hamas-ruled Gaza
in decades, seeking to halt rocket attacks by Hamas.
Top OPEC exporter Saudi Arabia is set to cut oil supplies
further in February, market sources said on Tuesday,
potentially taking output below its agreed OPEC target.
[]
With oil coming off more than $100 from a record peak above
$147 a barrel in July, the Organization of the Petroleum
Exporting Countries has announced its biggest-ever production
cut of 2.2 million barrels per day to fight the price slide.
The group already has cut output three times in an effort
to remove about 5 percent of world supply.
(Reporting by Chua Baizhen; Editing by Michael Urquhart)
