UPDATE 7-Oil falls 4 percent as U.S. job losses mount

                                
 * U.S. jobs data worse-than-expected in January
                                
 * Market eyes possible U.S. stimulus package
                                
 (Recasts, adds detail throughout, updates timeline from
previous LONDON)
                                
 By Edward McAllister
                                
 NEW YORK, Feb 6 (Reuters) - Oil prices fell over 4 percent
on Friday after news of more job losses in the United States
heightened the prospect for still weaker demand in the world's
biggest oil consumer.
                                
 Nearly 600,000 jobs were slashed in the United States last
month, the most severe cut since December 1974.
[ID:nN06435445]
                                
 U.S. light crude for March delivery <CLc1> fell $1.71 to
$39.46 a barrel by 12.56 p.m. ET (1756 GMT). London Brent
<LCOc1>, which usually trades below its U.S. counterpart, fell
$1.28 cents to $45.18.
                                
 U.S. crude is trading well below Brent as inventories in
Cushing, Oklahoma -- the delivery point for the U.S. crude
contract -- are at record levels.
                                
 The economic slowdown has curbed demand for fuel around the
world, causing prices to fall over $100 from a peak near $150
last July.
                                
 "Crude has tested below $40 on the jobs losses but the fact
that crude has not gone down much deeper is due to the fact
that the stock market has held higher. Essentially, crude has
been range-trading on either side of $40 all week," said Tom
Knight trader at Truman Arnold in Texarkana, Texas.
                                
 Wall Street rose about 2 percent on Friday as the dire job
data persuaded investors that Washington would act quickly to
deliver an economic stimulus package. [ID:nN06439621]
                                
 Canada too suffered heavy job losses in January, the worst
in over three decades, with 129,000 workers pushed into
unemployment, according to data from Statistics Canada.
[ID:nN06253705]
                                
 Europe's largest economy, Germany, saw a massive 4.6 dive
in industrial output in December, with steel orders down 47
percent in the fourth quarter, deepening concern over the state
of Europe's economy. [ID:nL6508457]
                                
 Toyota, the world's top carmaker, said its losses were
growing as world car sales drop, while Volvo swung to a fourth
quarter loss. [ID:nL6573168]
                                
 The head of Italy's largest oil company predicted that oil
could stay as low as $40 for the rest of 2009.
                                
 "A price of $40 a barrel, it's roughly my forecast for this
year," Eni <ENI.MI> Chief Executive Paolo Scaroni said.
                                
 That level is too low for members of the Organization of
the Petroleum Exporting Countries to generate enough revenue or
encourage investment in new supply.
                                
 In a bid to boost prices, OPEC agreed to cut a further 2.2
million barrels per day (bpd) from January. The reduction comes
on top of curbs of 2 million bpd in place since September.
                                
 OPEC sources have indicated the group could cut a further 1
million bpd from output when it next meets on March 15.
                                
 "These are significant output cuts and if they can
implement more, then we should see global stock cover start to
come down. Until then, prices seem well supported above $40 a
barrel by the cuts so far," said Julian Keites at Newedge.
 (Additional reporting by Gene Ramos and Robert Gibbons in New
York, David Sheppard in London and Annika Breidthardt in
Singapore; editing by Marguerita Choy)