LONDON (Reuters) – Oil fell below $43 a barrel on Tuesday, reversing earlier gains as investors expected U.S. data to show another drop in fuel demand in the world's top consumer.
U.S. crude was down 54 cents at $43.17 a barrel at 1418 GMT (9:18 a.m. EST), after sinking earlier to $42.89.
London Brent crude eased by 59 cents to $42.83.
The downward trend for oil remained very much intact.
"$40 a barrel could be difficult to break, but we expect WTI to go lower in the coming months. GDP, oil demand weakness and the crude overhang are much clearer than OPEC cuts so far," said SG Commodities Research said in a weekly note.
Oil traders were awaiting the 1700 GMT release on Tuesday of the U.S. Energy Department's Short Term Energy Outlook, which was expected to show downgrades in 2009 oil demand estimates.
In a forecast issued last month, the Energy Department said total U.S. oil demand was projected to fall by an additional 250,000 bpd, or 1.3 percent next year, after dropping 1.1 million bpd, or 5.4 percent, in 2008.
The outlook for global oil consumption is very much on the minds of ministers from the Organization of the Petroleum Exporting Countries, which meets on December 17 in Algeria.
OPEC is expected to reduce overall production by a minimum of one million barrels per day (bpd).
"Oil is on a count-down to OPEC now and everyone is expecting them to come up with something big -- probably a cut of 1-1.5 million bpd," said Rob Laughlin, senior oil analyst at brokers MF Global in London.
"If OPEC doesn't make a big cut, this market is in trouble."
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