* Oil below $37 on persistent demand concerns
* IEA sees demand recovery in 2010, possible supply crunch
* President Obama to sign stimulus bill on Tuesday
(Updates prices, adds trader comments)
SINGAPORE, Feb 17 (Reuters) - U.S. oil prices hung below
$37 a barrel on Tuesday as bleak economic indicators in Asia
returned focus to the worldwide oil demand slump.
Following Monday data showing Japan's economy shrank by the
most in 35 years, a Reuters poll showed confidence among
manufacturers remained mired near record lows and service
sector sentiment fell to its poorest ever. []
"Concerns over weak oil consumption continue to weigh on
the oil price," David Moore, a commodities analyst at
Commonwealth Bank of Australia, said in a note.
U.S. light crude <CLc1> fell to $36.76 a barrel by 0457
GMT, 75 cents off last Friday's settlement but slightly higher
than late European trading a day ago.
The New York Mercantile Exchange did not print a settlement
price on Monday as its trading floor was closed for Presidents'
Day, although electronic trading continued as normal. The floor
will reopen later on Tuesday.
Ahead of the March contract's expiry on Friday, it was
trading at a wide $4.50 discount to April due to high stock
levels at the main U.S. storage hub in Cushing, Oklahoma.
April futures <CLJ9> were at $41.26 a barrel, holding above
the $40 support level seen by some traders. The mid-$30s was
expected to be the next floor.
"The $35 to $36 level should be a pretty strong support. I
think OPEC will definitely cut more production if we get
there," said Clarence Chu, a trader at U.S.-based Hudson
Capital Energy in Singapore.
London Brent crude <LCOc1> for April rose 72 cents to
$44.00 in thin Asian trading.
The top 600 companies in South Korea, Asia's fourth largest
economy, plan to cut their capital investments this year for
the first time in eight years, South Korea's main lobby group
for large companies said on Tuesday. []
World energy demand has fallen considerably in the last few
months as the economic crisis hit consumers, pulling oil prices
more than 70 percent off the peak above $147 touched last July.
To take advantage of low prices, Russia is working towards
creating a state reserve to buy crude from producers,
potentially removing up to 16 million tonnes of Russian oil
from export markets, a top energy official said. []
Prices may regain traction from improved consumption next
year, with IEA Executive Director Nobuo Tanaka saying he
expects world oil demand to resume growing in 2010 by about 1
million barrels per day (bpd).
But he cautioned about a supply crunch from next year if
investment in new oil production and alternative forms of
energy were reduced by the current demand downturn.
Later on Tuesday U.S. President Barack Obama is due to sign
the $787 billion economic stimulus bill, while indicators
including manufacturing production in New York State and U.S.
home builder sentiment for February may set the market's tone.
(Reporting by Chua Baizhen, Editing by Clarence Fernandez)
