LONDON (Reuters) - Oil fell below $70 a barrel on Wednesday, pressured by a gloomy outlook for the global economy that could limit the impact of any supply cuts OPEC might agree at a meeting on Friday.
Falls in Asian and European stock markets, plus the U.S. dollar's rise to a 2-year high against a basket of currencies added to pressure on oil and other commodities.
U.S. crude for December delivery was down $2.86 at $69.32 by 4:53 a.m. EDT, recovering from an earlier trough of $68.90 a barrel. Last week the price fell to $68.57, its lowest since June 2007 and less than half a record high in July.
London Brent crude was down $2.62 at $67.10.
"People are just scared that the economy is going down the tube," said Tony Nunan, assistant manager of risk management at Mitsubishi Corp in Tokyo.
"There is a feeling that we are now going to see problems in the real economy; employment, real estate prices will continue to fall and the big concern now is how much economic growth is going to suffer."
The price of oil has more than halved from a record high above $147 in July as fallout from the financial crisis has started to hit energy demand in the United States, the world's largest energy consumer, and other industrial countries.
The Organization of the Petroleum Exporting Countries called an emergency meeting this Friday, when the producer group is widely expected to agree to cut supply to defend prices.
OPEC Secretary General Abdullah al-Badri has said that the world would face a huge oversupply of oil next year, if production continued at current rates.
Badri is in Moscow where he is due to meet Dmitry Medvedev, president of Russia, which is the world's second largest oil exporter after Saudi Arabia.
Other top OPEC officials have called on Russia this week to join OPEC in cutting production. Badri said he would not ask Russia for a cut.
Russia's ministry of energy is considering creating an oil production reserve to influence global prices, Deputy Prime Minister Igor Sechin said.
More evidence of mounting global supplies is expected to emerge later in the day, when the U.S. government publishes weekly statistics on oil inventories.
U.S. crude oil stocks are expected to have risen by 2.6 million barrels last week, according to a Reuters poll of analysts.
A 100,000 increase in distillate stocks and a 2.8 million barrel build in gasoline inventories is also expected in the data.
