* Market eyes dollar, economic indicators
* EIA expects 1.1 mln barrel per day OPEC cut by January
* Goldman Sachs lays off 3,200 employees
(Updates throughout, changes dateline, pvs PERTH)
By David Sheppard
LONDON, Nov 6 (Reuters) - Oil fell below $65 a barrel on
Thursday, extending a 7 percent drop in the previous session, as
heightened fears of a demand-crushing global recession weighed
on sentiment.
Growing U.S. fuel stockpiles, which underscored slackening
oil demand, dollar strength and a sharp slide in global equities
also helped pull oil prices lower.
U.S. light crude for December delivery <CLc1> fell 74 cents
to $64.56 a barrel by 0935 GMT. U.S. light crude fell by $5.23
to settle at $65.30 a barrel on Wednesday.
London Brent Crude <LCOc1> fell 59 cents to $61.28, having
earlier fallen to a low of $60.00 a barrel.
"Stock markets are taking a bit of a belting and oil's being
dragged down by a broader equity and commodity sell-off," said
MF Global global analyst Robert Laughlin. "Demand has slowed,
but I don't think prices will go much lower without OPEC making
further production cuts."
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 on Thursday. Dollar strength
tends to lessen demand for dollar-priced commodities. []
The initial euphoria of election day in the United States
fizzled, as Democrat Barack Obama's first day as president-elect
was marked by reports of deep cuts in employment by private
employers, bringing worries of a weakening global economy back
to the fore.
European equities fell by more than 2 percent in early
trade, tracking steep declines in U.S. and Asian shares.
[]
Analysts said traders would 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 energy consumer is faring.
Reports on Wednesday showed U.S. employers 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 that bellwether technology
company Cisco warned revenue could fall as much as 10 percent
added to the gloom. [] []
U.S. gasoline stocks rose by 1.1 million barrels last week,
against analyst predictions for a drop, as demand for the fuel
fell 2.3 percent over a four-week period to Oct. 31, the Energy
Information Administration (EIA)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. []
However, many analysts think OPEC could move to cut output
further if prices fall below $60 a barrel, as member nations
struggle to balance their budgets following the near 60 percent
collapse in oil prices since July.
Prices took some support from reports that an explosion on
the Turkish section of the Kirkuk-Ceyhan pipeline had cut its
oil flow late on Wednesday. The cause of the explosion was not
yet known.
The pipeline was flowing at 480,000 bpd last month, carrying
crude from northern Iraq to the Turkish port of Ceyhan on the
Mediterranean Sea.
(Additional reporting by Fayen Wong in Perth)
(Editing by Christopher Johnson)
