Oil falls $3 to lowest in nearly 4 years

NEW YORK Thu Dec 4, 2008 3:51pm EST

A New York City cab driver fills his taxi up with gas at a Hess station in New York, July 2, 2008. REUTERS/Shannon Stapleton

A New York City cab driver fills his taxi up with gas at a Hess station in New York, July 2, 2008.

Credit: Reuters/Shannon Stapleton

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NEW YORK (Reuters) - Oil fell more than 6 percent on Thursday to its lowest level in nearly four years in response to further bleak economic data that could spell a deeper decline in global energy demand.

The number of U.S. workers on jobless rolls hit a 26-year high last month, the government said, while another report showed U.S. factory orders fell sharply for the third month in a row.

U.S. light crude fell $3.12 to settle at $43.67, the lowest since January5, 2005. London Brent crude fell $3.16 settling at $42.28.

Oil prices have dropped more than $100 a barrel from record highs over $147 in July, as the global credit crunch has eaten into demand in large consumer nations.

"Relentless negativity is pressuring the oil complex," said Mike Fitzpatrick, vice president at MF Global.

U.S. stocks fell on Thursday as the continued fall in oil prices pushed down shares in energy companies including Exxon Mobil.

A Commerce Department report showed that factory orders in October plunged 5.1 percent, the biggest drop since July 2000, and a Labor Department report showed that the number of U.S. workers on jobless benefits rolls was the highest since December 1982.

AT&T Inc and DuPont Co on Thursday led the list of blue-chip U.S. companies laying off workers in the weeks before the Christmas holidays.

European central banks cut interest rates on Thursday to try to restore some vitality to their feeble economies, many of which are already in recession.

Sweden's central bank cut by a record 175 basis points, the European Central Bank cut by 75 points and the Bank of England cut by 100 points.

Oil producer group the Organization of the Petroleum Exporting Countries will consider another round of output curbs to try to defend prices when it next meets on December 17 in Algeria.

OPEC President Chakib Khelil told Algerian state television on Thursday that the oil-producing cartel should cut oil output by a significant amount at the meeting if prices remain at their current level.

"If prices stay at their current level, we know that we should take a severe decision concerning an output cut," he said.

(Additional reporting by Gene Ramos and Robert Gibbons in New York, Jane Merriman in London and Maryelle Demongeot in Singapore; Editing by Christian Wiessner)

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