* Iran says OPEC could cut output again in March
* Russia-Ukraine gas dispute appears resolved
(Recasts, updates prices, changes dateline from LONDON)
NEW YORK, Jan 12 (Reuters) - Oil prices fell more than 7
percent on Monday, dragged down by growing evidence that
economic recession is reducing global energy consumption.
The decline came as Russia and Ukraine signed a deal to
help secure the resumption of Russian gas supplies to Europe,
cut off for nearly a week in freezing temperatures.
U.S. light crude for February delivery <CLc1> was trading
at $37.89 a barrel, down $2.94, by noon EST (1700 GMT). London
Brent crude <LCOc1> was down $1.98 at $42.44.
U.S. jobless data on Friday set the tone for the market. A
U.S. government report showed employers slashed jobs by 524,000
in December, driving the national unemployment rate to its
highest level in almost 16 years. []
"The U.S. unemployment numbers on Friday started the latest
leg downwards. We have had a string of bad news, with companies
and economies all reporting negative data. It is almost
relentlessly bad," said Rob Laughlin, senior oil analyst at MF
Global in London.
Oil prices fell 54 percent last year and have shed more
than $100 from a record peak above $147 a barrel in July as the
global economic downturn hits demand for fuel.
SUPPLY CUTS
Saudi Arabia, the world's top oil exporter, plans to cut
output by up to 300,000 barrels per day below its agreed OPEC
target, a proactive step to prop up a collapsing market,
industry sources said on Sunday. []
Riyadh already has lowered supply this month to 8 million
bpd, meeting its target under OPEC's pact to reduce overall
supplies by a record amount from Jan. 1.
Saudi Arabia's cutbacks add to similar moves this month by
other OPEC producers, including Iran, the United Arab Emirates,
Kuwait and Libya, to curb supplies, although evidence that oil
producers are cutting output has not lent much support to
prices so far.
Iran's representative to the Organization of Petroleum
Exporting Countries was quoted as saying the group could decide
to reduce oil output again at its meeting in March, if crude
prices fell further. []
The front months on oil futures have been taking the brunt
of the falls, with the markets in steep contango. March U.S.
crude futures have been trading more than $5 above February,
while April is around $3 above March.
Traders say the wide price spread partly reflects a lack of
prompt demand, but also a view that OPEC cuts will eventually
start to affect the market and support prices.
In the Middle East, Israeli leaders trying to find a
knockout blow for Hamas militants defying a 17-day-old assault
have thrown army reservists into the battle. []
Most oil analysts said they were bearish for prices in the
short term.
Goldman Sachs Commodities said in a research note on Friday
that a market surplus was expected to drive inventories higher
and put pressure on its forecast oil price of $30 a barrel for
the first quarter of 2009.
But it maintained its forecast that oil would recover to
around $65 per barrel by the end of this year as the market
rebalances following the global recession.
(Additional reporting by Christopher Johnson in London; Fayen
Wong in Perth; Editing by Walter Bagley)
