LONDON - OIL prices tumbled on Wednesday as US data showed demand falling in the world's biggest energy consumer, highlighting worries about the slowing global economy.

On the New York Mercantile Exchange, light sweet crude for December delivery dropped US$5.23 (S$7.758) a barrel to close at US$65.30.

In London, Brent North Sea crude for December fell US$4.57 to settle at US$61.87 on the InterContinental Exchange.

The DoE said that crude reserves held steady instead of rising the 1.2 million barrels forecast by analysts.

US energy demand continued to decline. Americans consumed 6.7 per cent less crude in the past four weeks compared with the same period a year ago, the goverment data showed.

'Demand is starting to wane quite considerably,' Sucden analyst Robert Montesfusco told wires agencies.

'We are not seeing any good demand.'

The price of oil has more than halved from record highs above US$147 in July amid rising concerns about global demand as a financial crisis batters economies.

'Worries over the international economic outlook have not disappeared,' said Mr David Moore, a commodity strategist with the Commonwealth Bank of Australia.

The market also reacted to the landslide election of Democrat Barack Obama as the 44th US president late on Tuesday.

Mr Obama, the first African-American to win the presidency, vowed during his campaign that his administration would slash the economy's dependence on foreign oil.

'There will be no problem for the Gulf countries in the foreseeable future even if Mr Obama succeeds in implementing his policy,' said the head of the Saudi Al-Dakkak Economic Studies House, Mr Ali al-Dakkak.

'Whatever the United States does, it will continue to need foreign oil for a very long time,' Jeddah-based Dakkak told the wires.

Oil prices had soared US$6 on Tuesday to above US$70 in New York as the US currency weakened against the euro and on evidence that OPEC crude exporters were cutting production as promised, analysts said.

A weaker dollar makes oil priced in the US unit cheaper for buyers holding stronger currencies, pushing up demand.

'Participants took encouragement from a break in the dollar's recent climb to new heights, but, more importantly, the Saudis appear to be complying with the Oct 24 decision by Opec to cut output,' said Mr John Kilduff at MF Global.

'This does not obviate concerns about demand,' Mr Kilduff added.

The Organisation of the Petroleum Exporting Countries (Opec), which pumps about 40 per cent of the world's oil, said it would cut output by 1.5 million barrels per day from Nov 1 to counter falling prices. -- AFP

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