* Oil falls below $70, close to 16-month lows
* OPEC says action needed to avoid huge oil glut
* U.S. data may show increase in crude, gasoline stocks
* Russia may create oil reserve
(Recasts, updates prices, previous PERTH)
LONDON, Oct 22 (Reuters) - Oil fell below $70 a barrel on
Wednesday, pressured by a gloomy outlook for the global economy
that could limit the impact of any supply cuts OPEC might agree
at a meeting on Friday.
Falls in Asian and European stock markets, plus the U.S.
dollar's rise to a 2-year high against a basket of currencies
added to pressure on oil and other commodities.
U.S. crude for December delivery <CLc1> was down $2.86 at
$69.32 by 0853 GMT, recovering from an earlier trough of $68.90
a barrel. Last week the price fell to $68.57, its lowest since
June 2007 and less than half a record high in July.
London Brent crude <LCOc1> was down $2.62 at $67.10.
"People are just scared that the economy is going down the
tube," said Tony Nunan, assistant manager of risk management at
Mitsubishi Corp in Tokyo.
"There is a feeling that we are now going to see problems in
the real economy; employment, real estate prices will continue
to fall and the big concern now is how much economic growth is
going to suffer."
The price of oil has more than halved from a record high
above $147 in July as fallout from the financial crisis has
started to hit energy demand in the United States, the world's
largest energy consumer, and other industrial countries.
The Organization of the Petroleum Exporting Countries called
an emergency meeting this Friday, when the producer group is
widely expected to agree to cut supply to defend prices.
OPEC Secretary General Abdullah al-Badri has said that the
world would face a huge oversupply of oil next year, if
production continued at current rates. []
Badri is in Moscow where he is due to meet Dmitry Medvedev,
president of Russia, which is the world's second largest oil
exporter after Saudi Arabia.
Other top OPEC officials have called on Russia this week to
join OPEC in cutting production. Badri said he would not ask
Russia for a cut.
Russia's ministry of energy is considering creating an oil
production reserve to influence global prices, Deputy Prime
Minister Igor Sechin said. []
More evidence of mounting global supplies is expected to
emerge later in the day, when the U.S. government publishes
weekly statistics on oil inventories.
U.S. crude oil stocks are expected to have risen by 2.6
million barrels last week, according to a Reuters poll of
analysts. []
A 100,000 increase in distillate stocks and a 2.8 million
barrel build in gasoline inventories is also expected in the
data.
