By Christian Schmollinger Oct. 23 (Bloomberg) -- Crude oil pared gains in New York on signs that global demand for fuels will slow as the U.S. and European economies may enter a recession, outweighing the prospects of an OPEC production cut. U.S. fuel demand during the past four weeks was down 8.5 percent from a year ago, an Energy Department report yesterday showed. OPEC may reduce output by at least 1 million barrels a day when the group meets in Vienna tomorrow, according to an analyst survey. The International Energy Agency said Oct. 10 that demand among its member nations will fall 2.2 percent in 2008. ``The demand question is the current focus of the market,'' Russell Norton, head of commodity sales at Barclays Capital, said in an interview with Bloomberg Television in Singapore. ``We've seen demand come off in the OECD countries very significantly. China and India, which have been the main focus of increases in demand, have slowed down.'' Crude oil for December delivery was at $66.97 a barrel, up 22 cents, at 12:56 p.m. Singapore time on the New York Mercantile Exchange. It earlier rose as much as $1.06, or 1.6 percent, to $67.81 a barrel. Prices have tumbled 55 percent from the record $147.27 on July 11 and dropped 22 percent from a year ago. U.S. gasoline demand averaged 8.8 million barrels a day over the past four weeks, down 4.3 percent from the same period last year, the report showed. Consumption of distillate fuel, a category that includes heating oil and diesel, averaged 3.9 million barrels a day, down 5.8 percent. High Inventories Brent crude oil for December settlement was at $64.91 a barrel, up 39 cents, on London's ICE Futures Europe exchange at 1:07 p.m. Singapore time. It earlier rose as much as 95 cents, or 1.5 percent, to $65.47 a barrel. The contract fell yesterday $5.20, or 7.5 percent, to $64.52 a barrel, the lowest close since May 7, 2007. Global oil inventories are ``high'' as some OPEC members struggle to sell crude amid the global financial crisis, OPEC President Chakib Khelil said yesterday as he arrived in Vienna. ``The question of reduction has to be discussed,'' said Khelil, declining to comment on the size of production quotas. U.S. crude oil inventories rose 3.18 million barrels to 311.4 million barrels, the report showed. It was the fourth- straight increase. A gain of 2.65 million barrels was forecast, according to the median of responses in a Bloomberg News survey. Gasoline stockpiles jumped 2.7 million barrels to 196.5 million barrels, which was in line with analyst's estimates. Distillate fuel supplies climbed 2.2 million barrels to 124.3 million barrels, more than the 300,000 barrel forecast. To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

Source