* Oil falls nearly 3 percent
* U.S. consumer spending down in September
* Kuwait latest to cut export volumes after OPEC agreement
(Recasts, updates prices, market activity)
By Edward McAllister
NEW YORK, Oct 31 (Reuters) - Oil fell nearly $2 on Friday
as weak demand and the global economic crisis put crude on
track for the biggest monthly drop ever.
U.S. crude <CLc1> fell $1.82, or almost 3 percent, to
$64.14 a barrel by 12:00 p.m. EDT (1600 GMT). It is down by
around 35 percent for October, its steepest monthly decline to
date as demand in the United States and other big consumer
nations slows.
London Brent crude <LCOc1> traded down $1.98 to $61.73.
The U.S. Commerce Department reported that American
consumers cut spending for the first time in two years in
September, as confidence drained. []
This coincided with data released on Thursday which showed
that U.S. gross domestic product contracted at an annual rate
of 0.3 percent for the third quarter.
It was the sharpest economic decline in seven years for the
United States, the world's largest oil consumer, provoking
further falls across commodities and global stock markets, also
poised for their worst month yet. []
A stronger U.S. dollar, which makes dollar-denominated
assets less attractive to buyers, further pressured
commodities. []
"It could even take a large part of 2009 before we see an
increase in demand again," said Peter Beutel, president of
trading consultants Cameron Hanover in Stamford, Connecticut.
"In the meantime, oil prices are likely to continue to
react to equities moves, the U.S. dollar's relationship to the
euro, OPEC production cuts and the weather," he added.
In three months oil has wiped out gains that took more than
a year to build, down more than half since it struck a record
high of $147.27 in July.
Demand has shrunk amid economic weakness across the world,
with a slump in global stock markets outweighing any sign of
tighter supplies from OPEC.
Following a decision last week by the Organization of the
Petroleum Exporting Countries to cut output by 1.5 million
barrels per day (bpd), evidence has begun to emerge the group
means what it said.
Kuwait on Friday informed customers it was cutting crude
supplies by 5 percent in November. []
Earlier in the week, Nigeria and the United Arab Emirates
told customers they would receive less oil, but top exporter
Saudi Arabia has yet to inform customers of any fresh curbs.
Venezuelan Oil Minister Rafael Ramirez said on Thursday
OPEC should cut oil output by another 1 million bpd -- possibly
before its next scheduled meeting in December -- and should set
a minimum price target of $70 or $80 a barrel. []
(Additional reporting by Gene Ramos and Robert Gibbons in New
York, Joe Brock in London and Maryelle Demongeot in Singapore;
Editing by David Gregorio)
