LONDON (Reuters) - Oil fell to around $37 a barrel and touched a three-week low on Tuesday as further signs that the world economy is slowing sharply dampened demand expectations.
Three major forecasters are scheduled this week to update their outlooks for world oil demand in the midst of the slowdown, and some analysts expect the reports may lower demand forecasts for 2009 further.
"Oil prices seem destined to test lower in coming days as many bullish factors appear to be receding whilst the economic downturn seems to be tightening its grip in 2009," said Rob Laughlin of MF Global.
U.S. crude fell 73 cents to $36.86 a barrel by 8:11 a.m. EST. Prices have fallen by more than $10 in the past week and hit a low of $36.10 early Tuesday. Brent crude was up 17 cents to $43.08 a barrel.
The spread between Brent and U.S. crude has widened sharply as high inventory levels pressure the U.S. benchmark. Stock levels at Cushing, Oklahoma, the delivery point for U.S. crude futures, are at record levels.
Slumping fuel demand due to the global slowdown sent oil prices down 54 percent last year, and crude is now off more than $110 from its record high of $147.27 a barrel last July.
The global economic situation is worsening and new forecasts to be released shortly from the International Monetary Fund will not be optimistic on the outlook, IMF Managing Director Dominique Strauss-Kahn said.
Oil also fell due to the resumption of Russian gas supplies to Europe -- whose disruption helped oil rally back to $50 a barrel at the start of the year.
Russia started pumping gas destined for Europe through Ukraine on Tuesday for the first time in nearly a week, but the European Union said little or no gas was flowing to countries suffering urgent energy shortages.
"It's generally a very negative tone out there and there is a lot of pessimism on oil demand in the near term," said Toby Hassall, chief analyst at Commodity Warrants Australia in Sydney.
In a further sign that energy consumption in the U.S. is weak, a Reuters poll ahead of Wednesday's U.S. inventory report forecast crude stocks rose by 2.2 million barrels last week, the third weekly gain.
(Additional reporting by David Sheppard in London, Fayen Wong in Perth and Chua Baizhen in Singapore; Editing by Peter Blackburn)
