UPDATE 10-Oil falls 7 pct on weak US economic data

                                
 * U.S. consumer confidence hits record low in January
                                
 * U.S. home prices down record 18.2 pct in November
                                
 * Valero deepens refinery run cuts
 (Updates prices, adds details Valero in paragraph 9)
                                
 By Matthew Robinson
                                
 NEW YORK, Jan 27 (Reuters) - Oil fell 7 percent on Tuesday
after bleak economic data from top energy consumer the United
States stirred demand concerns.
                                
 U.S. consumer confidence slipped to a record low in
January, a survey showed on Tuesday, as governments around the
world offered further help to banks and industries battered by
the financial crisis. [ID:nT114397]
                                
 U.S. home prices, meanwhile, plunged a record 18.2 percent
in November from a year earlier as the housing market remained
in the throes of a deep recession, Standard & Poor's data
showed on Tuesday. [ID:nN27437845]
                                
 U.S. crude <CLc1> traded down $3.39 to $42.34 a barrel by
2:05 p.m. EST (1905 GMT), while London Brent crude <LCOc1> fell
$2.81 to $44.15 a barrel.
                                
 The global economic crisis has weakened crude demand,
especially in developed economies, and pushed prices off record
peaks over $147 a barrel struck in July.
                                
 British retailers gave their gloomiest forecast on record
for February on Tuesday in the Confederation of British
Industry's monthly survey, although data showed January sales
were less dismal than expected. [ID:nLR214554]
                                
 "The economy is still a drag on demand," said Tom Bentz, an
analyst at BNP Paribas Commodity Futures Inc.
                                
 Governments strung together lifelines to rescue their
battered economies on Tuesday, with the $825 billion U.S.
economic stimulus bill advanced another step. [ID:nN27380071]
                                
 Top U.S. refinery Valero <VLO.N> said it is cutting
refinery output and capital spending this year due to shrinking
demand. [ID:nN27455546]
                                
 U.S. inventory data to be released this week is expected to
show another build in stocks as consumption weakens, with a
Reuters poll forecasting a 2.9 million barrel build in crude
inventories last week. [ID:nN27395306]
                                
 Colder weather is expected to help draw down distillate
stocks by 700,000 barrels, while gasoline stocks are expected
to show a 1.6 million barrel gain.
                                
 Data from the U.S. Energy Information Administration is due
out on Wednesday at 10:30 a.m. EST (1530 GMT), while the
American Petroleum Institute will be released at its new time,
4:30 p.m. EST (2130 GMT) on Tuesday.
                                
 Rising inventories and slumping prices prompted producer
group OPEC to agree to a series of steep output cuts during the
second half of 2008.
                                
 Kuwait on Tuesday said it would support a further output
cut if needed, echoing comments by some of the other members of
the cartel. [ID:nLR313390]
                                
 The Organization of the Petroleum Exporting Countries next
meets on March 15 to decide on output policy. Some analysts say
current cuts may be insufficient to end the steep drop in
prices.
                                
 "Unless OPEC production cuts in January were substantially
greater than what we have assumed, it is still too early to be
calling an end to this current bear market," Goldman Sachs said
in a research note.
 (Reporting by Matthew Robinson, Robert Gibbons, and Gene Ramos
in New York; Jane Merriman in London; Jonathan Leff in
Singapore; editing by Jim Marshall)