By Fayen Wong
Oil at $71 a barrel amid concerns that expected output cut by OPEC will not be enough.
Oil fell more than $1 to around $71 a barrel on Wednesday, extending a 4 percent slide in the previous session, on mounting worries that output cuts by OPEC will not be enough to offset slackening energy demand.
Expectations that a report from the US Energy Information Administration, due for release later on Wednesday, would show a rise in crude stocks and product inventories also weighed on oil prices.
The Organization of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on Friday and is expected to reduce output to defend prices and temper the effects of the financial crisis.
OPEC Secretary General Abdullah al-Badri has led the call for output cuts, telling reporters on Tuesday that the world would face a huge oversupply of oil next year, if leading producers failed to cut supply.
US crude for December delivery was down $1.05 at $71.13 by early on Wednesday. November crude expired and settled down $3.36, or 4.5 percent, at $70.89 on Tuesday, wiping all of Monday's gains. London Brent crude fell 87 cents to $68.85.
"Concerns over weakening oil demand have dampened the oil price, even though the OPEC meeting is expected to lower production targets," David Moore, commodities strategist from the Commonwealth Bank of Australia, said in a morning note.
The slide occurred as Asian stocks fell on Wednesday, tracking losses in US markets on concerns that corporate earnings could be hit by slower consumer demand and that the global economy might be sliding towards recession.
Japan's benchmark Nikkei average was down 2.8 percent, Australia's S&P/ASX 200 down 2 percent and Hong Kong's Hang Seng opened down 1.1 percent.
The price of oil has slid 50 percent since hitting a record high above $147 in mid-July. It briefly touched a 16-month low of $68.57 last week on worries that the financial crisis would slash energy demand in the United States, the world's largest energy consumer, and other industrial countries.