Oil falls to lowest level since Feb, 2005

Oil fell below $46 a barrel to its lowest in nearly four years today, extending four consecutive days of declines in response to the bleak outlook for the world economy and oil demand.

Oil prices have dropped more than $100 a barrel from an all-time high of $147.27 hit in July.

U.S. light crude for January delivery was down 70 cents to $46.09 a barrel this morning. It earlier touched a low of $45.30, the lowest since Feb. 9, 2005.

London Brent crude was down 81 cents at $44.63.

Prices briefly rose yesterday when U.S. Energy Information Administration data revealed an unexpected fall in fuel inventories last week in the world's top energy consumer.

Crude stocks, for example, fell 400,000 barrels in the week to Nov. 28, against an expected 1.7 million barrels build.

Stocks of gasoline and distillates, which include heating oil, also showed surprise falls.

But U.S. refinery utilization fell 1.9 percentage points to 84.3 percent of capacity against a predicted rise of 0.2 percentage point, pointing to weak demand.

"Refiners began to cut processing rates significantly," Jan Stuart, economist in New York for UBS, said in a report.

Oil producer group OPEC will consider another round of output cuts to try to defend prices when it next meets on Dec. 17 in Algeria.

"For sure we will cut in Oran (Algeria)," Qatar's oil minister Abdullah al-Attiya said yesterday.

Oil's fall since July has mirrored the global economy's slide towards recession.

European central banks are expected to cut interest rates later today to try to restore some vitality to their feeble economies.

Sweden's central bank has cut by a record 175 basis points, prompting speculation of dramatic cuts elsewhere.