By Mark Shenk Oct. 30 (Bloomberg) -- Crude oil fell on concern that the biggest decline in the U.S. economy since 2001 will further curb fuel demand in the world's biggest energy consuming country. Oil retreated after a Commerce Department report showed that gross domestic product contracted at a 0.3 percent annual pace in the third quarter. UBS AG cut its forecast for oil prices for next year by 43 percent to $60 a barrel from $105 because the global economic slowdown may reduce demand. ``The GDP number is a reminder that the economy, and with it energy demand, won't be recovering anytime soon,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``After yesterday's rally the focus is returning to fears about demand destruction.'' Crude oil for December delivery dropped $2.28, or 3.4 percent, to $65.22 a barrel at 10:19 a.m. on the New York Mercantile Exchange. Futures touched $70.60, the highest since Oct. 22. Prices, which have tumbled 56 percent since reaching a record $147.27 on July 11, are down 28 percent from a year ago. ``Prices got just above $70 early today but failed to convincingly break through,'' said Tom Bentz, senior energy analyst at BNP Paribas in New York. The Organization of Petroleum Exporting Countries may curb only 850,000 barrels a day of oil supply by January, PFC Energy said in a report today. PFC expects Saudi Arabia to cut 600,000 barrels a day, the Washington-based oil consultant said. OPEC reduced its target by 1.5 million barrels a day after an emergency meeting Oct. 24. Brent crude oil for December settlement declined $2.26, or 3.5 percent, to $63.21 a barrel on London's ICE Futures Europe exchange. Futures touched $68.35 earlier today, the highest since Oct. 22. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

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