* Recession, demand worries weigh
* OPEC cuts world demand forecasts
* U.S. weekly oil stocks seen higher
(Updates with post-settlement low)
By Robert Gibbons
NEW YORK, Oct 15 (Reuters) - Oil tumbled on Wednesday,
sliding to a 13-month low on expectations that a deepening
economic slowdown will cut into already weakening demand.
Investors scurried to safe havens and global stock prices
fell sharply as concerns over a potential global recession
wiped away optimism fueled earlier this week by governments'
steps to avert a financial meltdown. []
U.S crude <CLc1> fell $4.09 a barrel to settle at $74.54.
Prices subsequently fell as low as $73.55 in
post-settlement Globex electronic trading, the lowest since
September 2007 and down more than 50 percent since reaching a
record over $147 in July.
London Brent crude <LCOc1> fell $3.73, or 5 percent, to
settle at $70.80 a barrel.
European leaders pressed for an overhaul of global
financial structures, building on trillion-dollar bank bailouts
announced this week. []
Federal Reserve Chairman Ben Bernanke said the United
States needs to enhance regulatory oversight authorities to
deal with asset bubbles, as occurred in the housing market,
that cause economic problems when they burst. []
U.S. retailers suffered their biggest monthly drop in sales
in more than three years in September, adding to concerns of a
potential recession in the world's top consumer. []
Slumping demand in the United States and other developed
economies, as well as a flight of investors from oil to safer
havens, has sent oil tumbling from July's record peak.
"The fall in crude futures prices today reflects movement
in the stock market, which mirrors fears about a recession that
will cut into demand for crude oil," said Joe Possillico,
broker for MF Global in New York.
Analysts have scaled back global demand growth estimates,
with the Organization of the Petroleum Exporting Countries
cutting its forecasts for world demand for crude next year in
its latest monthly report. []
"Even if governments are successful in calming equity
markets and unfreezing credit markets in the near future, the
fallout on the real economy from financial market headwinds is
expected to be considerable," the producer group said.
OPEC has set a November emergency meeting in Vienna to
assess the global financial crisis' effect on the oil market.
U.S. retail gasoline demand last week fell more than 9
percent year-on-year for a second straight week as consumer
spending slowed, MasterCard Advisors said. []
JP Morgan cut its average oil price forecast for 2009 to
$74.75 a barrel, citing the weak economic outlook.
"The oil market is caught in the wake of four tsunamis,"
the U.S. bank said. "A global recession, tighter credit,
increased refining capacity and rising non-OPEC supplies."
Hurricane Omar caused Hess Corp <HES.N> to begin shutting
units at its Hovensa refining joint venture in the U.S. Virgin
Islands, lending some support to oil futures. []
The storm briefly shut Venezuela's Puerto La Cruz refinery,
but operations were restored on Wednesday. []
Traders will scrutinize weekly U.S. oil inventory data due
on Thursday for indications on U.S. oil demand, and analysts
polled by Reuters expect increases in crude and oil products.
The data was forecast to show crude stocks up 1.9 million
barrels, a 600,000-barrel build in distillates and a
2.9-million-barrel gasoline supply rise last week. []
(Additional reporting by Matthew Robinson and Gene Ramos in
New York, Ikuko Kao and Jane Merriman in London and Chua
Baizhen in Singapore)
