* Oil falls below $70 to new 16-month lows
* OPEC says action needed to avoid huge oil glut
* U.S. data shows big rise in gasoline stocks
* Russia eyes swing producer role
(Adds U.S. data, analyst comment, updates prices)
By Jane Merriman
LONDON, Oct 22 (Reuters) - Oil fell to a new 16-month low
below $70 a barrel on Wednesday, as a big rise in U.S. fuel
inventories last week provided further evidence of an economic
slowdown in the world's biggest energy consumer.
Gloom about the global economic outlook could limit the
impact of any oil supply cuts OPEC might agree at a meeting on
Friday.
U.S. crude for December delivery <CLc1> was down $4.24 at
$67.94 by 1510 GMT. It touched a session low of $67.50, its
lowest since June 2007.
London Brent crude <LCOc1> was down $3.89 at $65.83.
U.S. crude oil stocks rose by 3.2 million barrels last week,
more than the 2.6 million barrels analysts had forecast. []
The Energy Information Administration also reported a rise
of 2.7 million barrels in gasoline stocks versus forecasts for a
2.8 million increase.
Distillate inventories were up by 2.2 million barrels, more
than the 100,000 forecast by analysts.
"The numbers look bearish on virtually all fronts," said Jim
Ritterbusch of Ritterbusch & Associates. "The data reinforces
our bearish view and ups the probability of $62 crude," he said.
TRACKING EQUITIES
Oil has been tracking downward moves in global equity
markets, which have been reacting to increasing evidence of a
global slowdown.
Steep falls in European and U.S. stock markets, plus the
U.S. dollar's rise to a 2-year high against a basket of
currencies on Wednesday helped drive down oil and and other
commodities.
"The relationship between oil and equities could be tested by
any decision by OPEC to reduce production at this week's
meeting," said Frances Hudson, global thematic strategist at
Standard Life Investments.
"But the current feeling is that falling demand will
outweigh the impact of a production cut."
The price of oil has more than halved from a record high
above $147 in July as 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 met 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.
But Russia is considering taking on a swing producer role to
influence global prices, with the creation of an oil production
reserve, Deputy Prime Minister Igor Sechin said. []
(Additional reporting by Fayen Wong; editing by James Jukwey)
