* Oil extends decline, falls below $65 a barrel
* Market eyes U.S. dollar, economic indicators
* EIA expects 1.1 mln barrel per day OPEC cut by January
(Updates prices)
By Fayen Wong
PERTH, Nov 6 (Reuters) - Oil fell below $65 a barrel on
Thursday, extending a 7 percent overnight drop, weighed down by
a strengthening dollar and as dismal economic data in the
United States sharpened fears of a deep and lasting global
recession.
Growing U.S. fuel stockpiles, which underscored slackening
oil demand, and a sharp slide in Asian stocks also helped pull
oil prices lower.
U.S. light crude for December delivery <CLc1> fell 82 cents
to $64.48 a barrel by 0659 GMT, around 4 percent above last
week's 17-month low of $61.89, after shedding $5.23 to settle
at $65.30 on Wednesday.
London Brent Crude <LCOc1> fell 98 cents to $60.89, after
declining as much as $1.06.
"The U.S. dollar and Asian stock markets are weighing on
oil. The outlook is still very bearish and the set of U.S.
economic data over the next few days may push oil prices
lower," said Clarence Chu, a trader at Hudson Capital Energy in
Singapore.
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. []
The initial euphoria of Election Day in the United States
fizzled 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.
Growing fears of a protracted global recession also dragged
down commodity-related currencies as well as Asian stocks,
which tumbled nearly 7 percent on Thursday. []
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.
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. []
The EIA said it expected OPEC production to be cut by 1.1
million barrels a day (bpd) by January, which would represent
about 70 percent of the cut of 1.5 million bpd agreed by OPEC
last month and would be higher than the usual 50 percent
compliance with previous cuts. []
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.
(Editing by Ben Tan)
