Oil drops to $36 on grim world economic outlook

OIL SLIP: Oil recovered slightly to $38 a barrel on Thursday. (Getty Images)

Oil fell towards $36 a barrel on Thursday after gloom about the health of the world economy put a cap on earlier modest gains.

The uncertain global economic outlook prompted OPEC to forecast a fall of 180,000 barrels per day in world oil demand this year, 30,000 bpd more than its previous forecast.

US light crude for February delivery was down 50 cents at $36.78 a barrel by 17.55 UAE time, after having fallen by as much as $1.15 in early session trade.

Record stocks at Cushing, Oklahoma, the delivery point for US crude futures, have helped drive U.S. crude prices down relative to Brent.

U.S. crude for February, for example, is currently at a record discount to Brent of more than $10 a barrel.

London Brent crude for February rose $1.57 to $46.65 a barrel, ahead of the contract's expiry later in the session.

"You had an oil market that got a boost at the beginning of the year, partially on holiday consumption, partially on cold weather...but now it's back on continuing dismal economic data," said Harry Tchilinguirian at BNP Paribas.

Oil was $147 a barrel in July but has tumbled as the economic crisis had clipped global oil demand.

The US Energy Information Administration this week forecast a world consumption drop of more than 800,000 barrels per day (bpd) this year.(Reuters)

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