* Chinese oil demand down 3.2 percent in November
* Saudi oil minister says "don't doubt" OPEC efforts
(Adds Brent crude settle in graph 4)
By Matthew Robinson
NEW YORK, Dec 22 (Reuters) - Oil dropped nearly 6 percent to
below $40 a barrel on Monday on signs the global economic malaise
was slowing fuel demand further.
Apparent oil consumption in China fell by 3.2 percent in
November from a year ago, according to Reuters calculations, while
crude imports into the world's No. 2 energy consumer dropped to the
lowest level this year. []
U.S. crude for February delivery <CLc1> settled down $2.45 at
$39.91 a barrel. The January contract touched $32.40 on Friday
before expiring, the lowest since February 2004, weighed down by
rising stock levels at the Cushing, Oklahoma, delivery point for the
New York Mercantile Exchange contract.
London Brent crude <LCOc1> settled $2.55 lower at $41.45 a
barrel.
"Chinese crude oil imports in November fell to their lowest
level this year," John Kilduff, senior vice president at MF Global,
wrote in a report. "Additionally, the Chinese central bank has made
its fifth interest rate cut this year in an attempt to keep growth
from faltering."
China on Monday cut interest rates for a fifth time since
September, and Japan warned it was sliding deeper into a recession
encroaching steadily on the global economy, closing factories and
throttling trade. []
Oil prices have fallen more than $100 since July as the global
financial turmoil threatens to trigger the first contraction in
world energy demand since 1983.
U.S. stocks slid on Monday as the economic slowdown continued to
eat into corporate profits and outlooks, while retailers tumbled on
worries of lackluster Christmas sales. []
Surging demand from China and other emerging nations sent crude
on a six-year rally to record highs over $147 a barrel stuck in
July, before the economic crisis began to slow demand in top
consumer the United States and big economies.
The Organization of the Petroleum Exporting Countries (OPEC)
last week agreed to reduce output by another 2.2 million barrels per
day, adding to agreements to cut 2 million bpd from global supplies
made since September to help balance the market and prop up prices.
"Don't doubt the efforts of OPEC or its members to return the
oil market to stability," Saudi Oil Minister Ali al-Naimi told
reporters over the weekend in Qatar. []
A senior OPEC delegate said the group was ready to reduce supply
further if needed after the latest round of cuts were agreed last
week, but added that he believed it had done enough for now to
balance the market.
"OPEC should not have to do anymore, but members are willing to
do more if they have to. You can never tell with this economy in
downturn," the delegate told Reuters.
Asian refiners have yet to receive notice from OPEC's core Gulf
members of any further reductions to oil supplies since the group
announced fresh cuts last week. []
A Reuters poll of analysts ahead of weekly U.S. data due out on
Wednesday forecast U.S. crude inventories rose by 300,000 barrels in
the week to Dec. 19, with distillate and gasoline stocks also
expected to have gained.
(Reporting by Matthew Robinson and Robert Gibbons in New York; Jane
Merriman in London and Fayen Wong in Perth; Editing by Marguerita
Choy)
