Oil extends loss below USD 65

US light crude for December delivery fell 82 cents to 64.48 a barrel by 0659 GMT, around 4 per cent above last week8217;s 17-month low of 61.89, after shedding 5.23 to settle at 65.30 on Wednesday.

London Brent Crude fell 98 cents to 60.89, after declining as much as 1.06.

8220;The US dollar and Asian stock markets are weighing on oil. The outlook is still very bearish and the set of US economic data over the next few days may push oil prices lower,8221; said Clarence Chu, a trader at Hudson Capital Energy in Singapore.

On Thursday, the euro and sterling fell against the dollar, pressured by expectations that the European central bank and the Bank of England will cut interest rates to save their economies from further deterioration.

The initial euphoria of Election Day in the United States fizzled swiftly, as Democrat Barack Obama8217;s first day as president-elect was marked by reports of deep cuts in employment by private employers, bringing worries about a weakening global economy back to the fore.

Growing fears of a protracted global recession also dragged down commodity-related currencies as well as Asian stocks, which tumbled nearly 7 per cent on Thursday.

Analysts said traders will be eyeing news of key US economic indicators, including a government report on weekly jobless claims due on Thursday at 1330 GMT and Friday8217;s unemployment data, to gauge how the economy of the world8217;s largest oil consumer is faring.

Reports released overnight showed US employers have cut 157,000 private sector jobs last month, while the service sector contracted sharply as the worst financial crisis in 80 years hammered the world8217;s largest economy. News that investment bank Goldman Sachs planned to lay off another 3,200 employees and bellwether finance company GMAC reported a 2.52 billion loss for the third quarter added to the gloom.

US gasoline stocks rose by 1.1 million barrels last week, against analyst forecasts of a draw, as demand for the fuel fell 2.3 per cent over a four-week period to Oct. 31, the Energy Information Administration said.

The EIA said it expected OPEC production to be cut by 1.1 million barrels a day bpd by January, which would represent about 70 per cent of the cut of 1.5 million bpd agreed by OPEC last month and would be higher than the usual 50 per cent compliance with previous cuts. US crude oil output in the Gulf of Mexico rose, with 246,103 barrels per day, or 18.9 per cent of US production there, still shut on Wednesday, versus 27.7 per cent on Oct. 30 as energy companies continue to restore operations after September8217;s hurricanes.