* OPEC expected to cut output at Friday meeting
* Asian demand for West African crude down
* Stock markets fall on recession concerns
(Recasts, updates prices, market activity, changes byline,
new dateline, previously LONDON)
By Edward McAllister
NEW YORK, Oct 21 (Reuters) - Oil tumbled more than 5
percent on Tuesday amid worries a global recession will crush
fuel demand, limiting the impact of any supply cuts by OPEC.
U.S. oil for November delivery <CLc1> tumbled $3.98 a
barrel to $70.27 by 12:33 p.m. (1633 GMT), after hitting a
session high of $75.69.
London Brent crude <LCOc1> traded $3.33 down to $68.70 a
barrel.
The slide came as U.S. stocks fell on concern that earnings
could be driven down by slower consumer demand. []
"Crude prices are down on demand consideration, with
weakness being stoked by bearish economic data," said Kyle
Cooper, director of research at IAF Advisors.
Total Asian demand for West African crude was down 27
percent to 918,000 barrels per day (bpd) in November from 1.25
million bpd in October as demand from India, Indonesia and
Taiwan decreased, according to traders. []
The oil market has slid 50 percent since hitting a record
high above $147 in mid-July. The fall came as demand slumped in
the United States, the world's largest energy consumer, and
other industrial countries hit by the credit crisis.
The Organization of the Petroleum Exporting Countries is
due to meet in Vienna on Friday. The producer group is expected
to reduce output to defend prices and temper the effects of the
financial crisis.
Iran has said a drop in demand could push OPEC to cut
output by 2-2.5 million barrels per day (bpd), while other
members have said a smaller cut may be needed.
"A cut of about 2 million barrels per day will only offset
the amount of U.S. demand that has been lost on a
year-over-year basis," said Edward Meir of broker MF Global.
"This leaves no extra barrels to offset the demand
vaporization that is almost certainly taking place in other
consuming markets," he said.
OPEC could face an intense debate on how much oil members
should take off global markets as they balance their price
needs against risks to a fragile world economy. []
The International Energy Agency, which advises
industrialised countries, has said an OPEC output cut could
prolong a global economic slowdown.
MARKETS SLIDE
Oil and commodities have tracked equity markets in the past
few weeks as the financial crisis hit the demand outlook.
U.S. stocks fell on Tuesday amid concerns the global
economy might be sliding towards recession [].
European shares gave up early gains that had followed a
rise in U.S. stock markets on Monday.
"I think (oil prices) moved in line with equities yesterday
and are now pulling back, using stock markets as a barometer
for demand," said Christopher Bellew at Bache Commodities.
Japan and France extended more help to banks, the IMF
prepared to intervene in trouble spots around the world and the
Fed devised a new plan to inject liquidity into money markets
to curb the worldwide financial crisis. []
U.S. crude oil inventories probably rose 2.3 million
barrels last week, a preliminary Reuters poll showed ahead of
the U.S. government energy data due on Wednesday.
The poll also showed forecasts for a 100,000-barrel rise in
distillate inventories, which include heating oil and diesel,
and a 2.1 million barrel gain in gasoline supplies.
(Reporting by Edward McAllister, Gene Ramos and Robert Gibbons
in New York; Joe Brock and Jane Merriam in London; Fayen Wong
in Perth; Editing by David Gregorio)
