* Oil extends decline, falls towards $65 a barrel
* Market eyes U.S. dollar, economic indicators
* EIA expects 1.1 mln barrel per day OPEC cut by Jan
By Fayen Wong
PERTH, Nov 6 (Reuters) - Oil fell towards $65 a barrel on
Thursday, extending its 7 percent overnight drop after rising
job losses sharpened worries of a global recession and growing
U.S. fuel stockpiles underscored dimming oil demand.
Profit-taking after prices surged more than 10 percent on
Tuesday, the dollar's gains versus the euro, and a sharp slide
on Wall Street also helped pull oil prices lower.
U.S. light crude for December delivery <CLc1> fell 25 cents
to $65.05 a barrel by 0042 GMT, or five percent above last
week's 17-month low of $61.89, after having shed $5.23 to
settle at $65.30 on Wednesday.
The initial euphoria of Election Day dissipated swiftly as
Democrat Barack Obama's first day as president-elect was marked
by reports of deep cuts in employment by private employers,
bringing worries about a weakening global economy back to the
fore.
"Worries that weakened international economic growth will
depress oil demand remain a key damping influence on the oil
price," David Moore, a commodities strategist at Commonwealth
Bank of Australia, told clients in a note.
Analysts said investors would also be closely watching
currency movements after Obama's victory in the U.S.
presidential race boosted the U.S. dollar. []
On Thursday, the euro and sterling fell against the dollar,
pressured by expectations that the European central bank and
the Bank of England will cut interest rates to save their
economies from further deterioration.
U.S. gasoline stocks rose by 1.1 million barrels last week,
against analyst forecasts of a draw, as demand for the fuel
fell 2.3 percent over a four-week period to Oct. 31, the Energy
Information Administration said. []
EYES ON JOBS INDICATORS
The report showed U.S. crude oil inventories were little
changed in the week, but the rise in gasoline and distillate
stocks, amid lower refinery utilisation rates, underscored
slowing demand in the United States.
Analysts said traders will be eyeing news of key U.S.
economic indicators, including a government report on weekly
jobless claims due on Thursday at 1330 GMT and Friday's
unemployment data, to gauge how the economy of the world's
largest oil consumer is faring.
Reports released overnight showed U.S. employers have cut
157,000 private sector jobs last month, while the service
sector contracted sharply as the worst financial crisis in 80
years hammered the world's largest economy. []
News that investment bank Goldman Sachs <GS.N> planned to lay
off another 3,200 employees [], and bellwether
finance company GMAC reported a $2.52 billion loss for the
third quarter added to the gloom.
The EIA said it expected OPEC production to be cut by 1.1
million barrels a day by January, representing about 70 percent
of the cut of 1.5 million barrels per day agreed by OPEC last
month. []
This would be higher than the usual 50 percent compliance
with previous cuts, the EIA said in its weekly oil market
review. OPEC member Angola said on Wednesday it had implemented
its share of the supply curbs.
U.S. crude oil output in the Gulf of Mexico rose, with
246,103 barrels per day, or 18.9 percent of U.S. production
there, still shut on Wednesday, versus 27.7 percent on Oct. 30
as energy companies continue to restore operations after
September's hurricanes.
(Reporting by Fayen Wong; Editing by Clarence Fernandez)
