(Fixes typo in headline)
* Oil falls nearly $3 to hover at a 1-week low
* OPEC says action needed to avoid huge oil glut
* U.S. data may show increase in crude, gasoline stocks
(Releads, updates prices, analyst comments)
By Fayen Wong
PERTH, Oct 22 (Reuters) - Oil fell nearly $3 to hit a
one-week low below $70 a barrel on Wednesday, extending a 4
percent slide in the previous session, on mounting worries that
output cuts by OPEC will not be enough to offset slackening
energy demand in leading consumers.
Expectations that a report from the U.S. Energy Information
Administration, due for release on Wednesday at 1435 GMT, would
show a rise in crude stocks and product inventories also
weighed on oil prices.
U.S. crude for December delivery <CLc1> fell $2.80, or 3.8
percent, to a week low of $69.42 by 0429 GMT. November crude
<CLX8> expired and settled down $3.36, or 4.5 percent, at
$70.89 on Tuesday, wiping all of Monday's gains.
London Brent crude <LCOc1> fell $2.52 to $67.20.
"Concerns over weakening oil demand have dampened the oil
price, even though the OPEC meeting is expected to lower
production targets," David Moore, commodities strategist from
the Commonwealth Bank of Australia, said in a note to clients.
Asian stocks fell on Wednesday, tracking losses in U.S.
markets as poor U.S. corporate results fanned worries of a
protracted economic slowdown. []
Japan's benchmark Nikkei average <> dropped 4.3
percent, Australia's S&P/ASX 200 <> down 3 percent and
Hong Kong's Hang Seng <> shed 2.8 percent.
"A lot of investors are beginning to use equities markets
as a guide to decide how the economy will be doing and its all
bearish at the moment," said Clarence Chu, a trader at Hudson
Capital Energy in Singapore.
"The fundamentals are getting less and less important for
oil these days. The market is just trading on sentiments."
INVENTORY OUTLOOK
The price of oil has slid more than 50 percent since
hitting a record high above $147 in mid-July. It briefly
touched a 16-month low of $68.57 last week on worries that the
financial crisis would slash energy demand in the United
States, the world's largest energy consumer, and other
industrial countries.
A Reuters poll of U.S. inventory data due out later on
Wednesday calls for crude oil to show a 2.6 million barrel
build. Also forecast is a 100,000 increase in distillates and a
2.8 million barrel build in gasoline stocks. []
U.S. weekly retail gasoline demand to Oct. 17 fell 6.4
percent year-on-year, Mastercard Advisors said Tuesday, though
it rose compared with the previous week. []
The Organization of the Petroleum Exporting Countries
(OPEC) was due to meet in Vienna on Friday and is expected to
reduce output to defend prices and temper the effects of the
financial crisis.
OPEC Secretary General Abdullah al-Badri has led the call
for output cuts, telling reporters on Tuesday that the world
would face a huge oversupply of oil next year, if leading
producers failed to cut supply. []
Though oil prices staged a strong rally earlier this week
on expectations that OPEC would make significant cut to output,
fears of a global recession have returned to haunt commodities.
The current U.S. economic downturn could be worse than the
1990-91 recession, with growth restrained for as long as one to
three years, a top Federal Reserve policy-maker said on
Tuesday. []
(Additional reporting by James Topham in Tokyo; Editing by
Sambit Mohanty)
