Oil futures fell early Wednesday ahead of the latest data on petroleum inventories and as dismal retail sales data highlighted the weakness of the U.S. economy. Crude oil for February delivery fell 29 cents to $37.49 a barrel on the New York Mercantile Exchange. "Larger-than-expected builds in crude this afternoon are likely to weigh on crude prices, especially given the negative sentiment as evidenced by sliding equity markets amid fears of a deepening global recession," said Nimit Khamar, an analyst at Sucden Financial Research. The Commerce Department estimated Wednesday that U.S. seasonally adjusted retail sales plunged 2.7% in December. Excluding the 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%. Excluding gasoline and autos, sales fell 1.5%, the largest drop since September 2001. See Economic Report. On Wall Street, U.S. stock futures dropped, with slumping retail sales and warnings from firms ranging from Deutsche Bank to Tiffany reigniting worries over the economy at large and the financial sector in particular. Supply data ahead The Energy Information Administration (EIA) will report last week's U.S. petroleum-inventories data at 10:30 a.m. Eastern on Wednesday. Analysts surveyed by Platts expect a buildup of 3 million barrels in U.S. commercial crude stocks for the week ended Jan. 9. They also expect an increase of 1.8 million barrels in gasoline inventories and a gain of 1.7 million barrels in distillates. Last week, the EIA reported that U.S. crude inventories jumped 6.7 million barrels in the week ended Jan. 2 to the highest level since May 2008. Traders will watch closely inventories at Cushing, Okla., which is the main delivery point for West Texas Intermediate (WTI) crude that's traded on the Nymex. Inventories at Cushing hit fresh record highs last week, causing the spread between Brent, which is traded in London, and WTI oil to widen significantly. Also on the Nymex Thursday, February reformulated gasoline fell 4 cents to $1.11 a gallon and February heating oil dropped 3 cents to $1.48 a gallon. February natural gas futures fell 8 cents to $5.11 per million British thermal units. On Wednesday, oil futures ended slightly higher after Saudi Arabia, OPEC's biggest oil producer, said it will cut production by more than the target set by the cartel in December. The Organization of Petroleum Exporting Countries, which controls about a third of the world's oil production, has announced a total production cut of 4.2 million barrels a day from its September output.

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