Oil falls below $53 on U.S. stocks rise

By Annika Breidthardt

SINGAPORE (Reuters) - Oil fell for a fifth straight session to below $53 on Thursday after U.S. crude inventories climbed twice as much as expected, signalling an economic downturn is hitting hard and demand for fuel is falling.

Oil also took its lead from equities, which fell in the United States and Europe to their lowest in 5- years after U.S. consumer prices dropped at a record pace in October and as prospects faded for a bailout of the U.S. car industry.

U.S. light crude for December delivery, due to expire later on Thursday, fell 77 cents or 1.4 percent to $52.85 a barrel at 6:16 a.m. British time, after falling to the lowest since January 22, 2007 in the previous session.

London Brent crude shed 87 cents to $50.85 a barrel.

"The lack of any positive news on the demand front as well as continued global economic turmoil continue to result in a dearth of bullish news," said Jonathan Kornafel, Asia director of Hudson Capital Energy.

U.S. crude oil inventories rose 1.6 million barrels last week, twice analysts' expectations, according to data from the Energy Information Administration.

Total product demand fell by 7 percent against year-ago levels, the EIA reported on Wednesday, as consumption falls due to the economic crisis.

U.S. Federal Reserve forecasts that the U.S. economy will contract in the first half of next year and concern about the potential for deflation in the world's top oil consumer also weighed on crude prices.