Oil falls to 22-month low at $55 on recession fears

LONDON/PERTH (Reuters) - Oil fell for a third straight day on Thursday to hit a 22-month low of $55 a barrel as mounting economic pessimism outweighed comments by OPEC that it could cut output again as early as end-November.

OPEC officials, concerned about oil's steep drop from record highs over $147 a barrel per day (bpd) in July, said the cartel could possibly decide by the end of the month to cut production again to raise prices.

But comments from the producer group failed to lift oil prices, as investors focussed on near-term demand worries after the U.S. Energy Information Administration (EIA) slashed America's 2008 oil demand outlook and the International Energy Agency (IEA) flagged further reduction in its oil forecast.

U.S. light crude for December delivery was down 61 cents at $55.5 a barrel by 8:55 a.m., after having fallen earlier to $54.67 -- the lowest since January 30, 2007.

London Brent crude fell $0.90 to $51.47, off an earlier low of $50.60.

"Oil prices continue to be pressured by fears that weaker international economic growth will depress oil consumption," said David Moore, an analyst at the Commonwealth Bank of Australia.

Oil fell 5 percent overnight, along with a big drop in U.S. stock markets, after the U.S. government shifted its position on how it planned to use its $700 billion (470 billion pounds) bailout fund, which added uncertainty to financial markets and renewed fears of a protracted global recession.

Expectations that U.S. government data to be released on Thursday would show a further build-up of crude and gasoline stocks also weighed on prices, analysts said.

Analysts polled by Reuters ahead of U.S. weekly inventory data forecast crude oil stocks rose 1.2 million barrels last week, while distillate and gasoline inventories were seen rising by 800,000 barrels and 300,000 barrels respectively.