* U.S. crude falls 2.4 percent to low of $57.90
* Fall extends previous session's loss of 5 pct
* Market shrugs off news of more OPEC supply cuts
* Analysts expect IEA to cut energy demand forecasts
(Recasts throughout)
By Christopher Johnson
LONDON, Nov 12 (Reuters) - Oil fell more than 2 percent on
Wednesday to trade below $58 a barrel for the first time in 20
months as expectations of weaker energy demand more than offset
news of reductions in supply.
The move extended a fall of 5 percent on Tuesday and
analysts said the mood in the market was so bearish that prices
could keep falling towards $50 a barrel.
News that OPEC could cut supplies by an additional 1 million
barrels per day (bpd) when it meets in Algeria next month did
little to prevent the downward spiral that has knocked 60
percent off oil's value from a record high of over $147 in
mid-July.
U.S. crude for December delivery <CLc1> hit a low of $57.90,
down $1.43 by 0903 GMT, before rallying to around $58.40 at 0930
GMT. In the previous session, the market settled down $3.08 at
$59.33 a barrel, its lowest settlement in 20 months.
London Brent crude <LCOc1> shed $1.20 to $54.51 a barrel.
"Fear that the global recession is worsening day by day is
driving this market down," said Rob Laughlin, senior oil analyst
at brokers MF Global. "Demand for oil is deteriorating week by
week."
Analysts expect the International Energy Agency (IEA) to
downgrade its forecasts for demand in its monthly oil market
report to be published on Thursday.
"BEARISH NEWS ALL AROUND"
"It's bearish news all around. I expect the IEA to further
revise down the energy demand forecasts," said Tobias Merath,
head of commodities research at Credit Suisse in Singapore.
"Even the new set of industrial production numbers due from
China and Japan this week should be having a bearish undertone."
China's industrial production growth slowed to about 8
percent in the year to October, the first time it has been in
single digits since the end of 2001, an official familiar with
the data said earlier this week. The official data is due on
Thursday.
In a research note, Credit Suisse added the U.S. Department
of Energy would probably cut its one-year WTI price forecast
when its publishes its Short Term Energy Outlook on Thursday.
The World Bank has slashed its 2009 forecast for developing
countries and has offered new financing of more than $100
billion over the next three years to help cope with the
financial crisis.
It revised downward its growth forecast for developing
economies to 4.5 percent for next year, from 6.4 percent
projected in June, on a combination of financial turmoil, slower
exports and weaker commodity prices.
An OPEC source said on Tuesday the group might cut oil
output by a further 1 million barrels per day when it meets next
month in Algeria because of slowing world demand. []
OPEC agreed last month to cut production by 1.5 million bpd
from Nov. 1 after the sharp fall in oil prices.
But Qatar, one of OPEC's smallest members, has told at least
two term buyers in Asia it would not cut its crude oil supplies
to them for November and December, sources with the lifters said
on Wednesday. []
This came even after Energy Minister Abdullah al-Attiyah
told Reuters last week that Qatar had cut crude oil exports to
Asia by about 40,000 bpd from this month in line with the OPEC
agreement.
U.S. weekly inventory data was expected to show an
800,000-barrel rise in crude stocks last week as demand
continues to slow, a Reuters poll of analysts found. []
Distillate stocks should rise by 500,000 barrels and
gasoline by 800,000 barrels, the poll showed. The data will be
released on Thursday, a day later than usual due to the U.S.
Veterans' Day holiday on Tuesday.
(Additional reporting by Sambit Mohanty in Singapore; Editing
by James Jukwey)
