By Grant Smith Oct. 8 (Bloomberg) -- Crude oil fell, giving up a rebound that followed coordinated interest rate cuts by central banks in the U.S., Europe and China intended to thaw credit markets. The Federal Reserve, European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank each cut their benchmark rates by half a percentage point to shore up confidence and global growth. Prices gained as much as 93 cents immediately after the rate reductions were announced. ``We're entering a steep cyclical downturn across almost all commodities,'' said Helen Henton, head of commodity research at Standard Chartered Plc in London. ``The demand picture will look increasingly worrisome for the next six months regardless of what central banks do.'' Crude oil for November delivery fell $1.65, or 1.8 percent, to $88.41 a barrel on the New York Mercantile Exchange at 9:49 a.m. in New York. Before the rates cuts, crude fell as much as 4.5 percent, to $86.05, the lowest since Dec. 6, 2007. Global stock markets traded lower after temporarily recouping losses following the rate cuts. Europe's Dow Jones Stoxx 600 Index was down 4.4 percent at 8:23 a.m. in New York. The Standard & Poor's 500 Index lost 1 percent. ``Forget even about $70 a barrel next year if there's a major recession,'' Leo Drollas, deputy executive director at the Center for Global Energy Studies, said today in an interview in Amsterdam. Oil ``will go slowly down further because the world economy is heading for the rocks.'' U.S. Fuel Supply The U.S. Energy Department will probably say that U.S. fuel supplies rose last week, according to Bloomberg survey before the department's weekly report, scheduled for release at 10:35 a.m. in Washington. Gasoline inventories probably gained 1.5 million barrels in the week ended Oct. 3 from 179.6 million barrels the week before. Consumption of the motor fuel dropped 9.5 percent from a year earlier to 8.625 million barrels a day last week, according to MasterCard Inc. ``Many commodities like platinum, agricultural commodities or gasoline have fallen below their production costs,'' said Jochen Hitzfeld, an analyst at UniCredit Markets & Investment Banking. ``Markets are overly pessimistic and prices will probably shoot up again in October.'' Brent crude oil for November settlement dropped as much as $3.66, or 4.3 percent, to $81 a barrel on London's ICE Futures Europe exchange and traded at $84.17 at 9:49 a.m. London time. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

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