* Oil falls to more than 13-month low, demand seen falling
* US data expected to show third weekly rise in crude stocks
* Hurricane Omar strengthens, Caribbean refinery shuts units
(Updates throughout)
By Joe Brock
LONDON, Oct 16 (Reuters) - Oil fell for a third straight
session on Thursday, hitting a 13-month low near $71, as
investors braced for a plunge in demand and economies teetered
on the brink of recession.
Oil's decline echoed global stock markets which dropped on
Thursday. European stocks <> fell after Wall Street and
Japan's Nikkei both suffered their worst one-day losses since
the stock market crash of 1987. []
U.S. crude for November delivery <CLc1> was $2.33, or 3.1
percent, down at $72.21 a barrel at 0850 GMT. The front-month
contract has lost nearly a third in value in three weeks, the
steepest such decline since it began trading in 1983.
London Brent crude <LCOc1> fell $2.80 to $68.
"Economic weakness is hitting the stock and oil markets, but
the oil price fall is also reflecting a lack of demand. It is
very difficult to buy oil if you are having a hard time getting
credit lined up," said Francisco Blanch, head of commodity
research at Merrill Lynch.
Crude has fallen by more than 50 percent from its July peak
above $147.
Analysts have scaled back global demand growth estimates
after a slew of gloomy data that has had a bigger market impact
than OPEC talk of possible production cuts and a hurricane that
has disrupted Caribbean refining operations.
Joining a series of analysts in sharply chopping back
forecasts, Bernstein Research cut its 2009 oil price view to $70
a barrel from $90 a barrel, while lowering its 2010 oil estimate
to $80 from $95.
OPEC
The Organization of the Petroleum Exporting Countries also
reduced its forecasts for world demand for crude next year in
its latest monthly report published on Wednesday.
The producer group has called an emergency meeting in
November in Vienna to assess the implications of the global
financial crisis on the oil market.
Expectations have mounted it will want to lend support to a
market that has been swept up in the deleveraging across
commodity markets.
Venezuelan President Hugo Chavez said oil prices would
probably keep falling as the U.S. economy headed south.
"The price of oil is falling? Yes. The price will carry on
falling? Probably. But Venezuela will not drown," he said.
Venezuela is one of the United States' biggest oil suppliers,
with about half its government revenue derived from oil.
U.S. weekly oil inventory data to be released later on
Thursday is expected to show crude oil stocks rose for the third
straight week, gaining 1.9 million barrels, while distillate and
gasoline stocks also increased following weak demand, a Reuters
poll showed [].
The data is being released at 1500 GMT, a day later than
usual because of the Columbus Day on Monday.
Hurricane Omar, which disrupted shipments from Venezuela
this week, strengthened into a major Category 3 storm on
Thursday as it headed toward Puerto Rico and the northeastern
Caribbean, but was on a northeast trajectory away from the U.S.
Gulf, the National Hurricane Center said. []
Processing units at the 500,000 barrel-per-day Hovensa
refinery on St. Croix in the U.S. Virgin Islands, a large
supplier of gasoline and heating oil to the U.S. East Coast,
were being shut down ahead of Omar's arrival, Hess Corp said.
(Reporting by Joe Brock; Editing by William Hardy)
