Oil Settles Below $44 to Lowest in Nearly 4 Years

Oil fell to its lowest level in nearly four years in response to more bleak economic data that could spell a deeper decline in global energy demand.

Data released Thursday showed the number of U.S. workers on jobless rolls hit a 26-year high and U.S. factory orders fell sharply for the third month in a row.

U.S. light, sweet crude dropped $3.12, or 6.67 percent, to settle at $43.67 a barrel—the lowest since January 2005. London Brent crude also traded lower.

Oil prices have dropped more than $100 a barrel from record highs over $147 in July, as the global credit crunch has eaten into demand in large consumer nations.

"Relentless negativity is pressuring the oil complex,'' said Mike Fitzpatrick, vice president at MF Global.

U.S. stocks fell on Thursday as the continued fall in oil prices pushed down shares in energy companies including Exxon Mobil .

A Commerce Department report showed that factory orders in October plunged 5.1 percent, the biggest drop since July 2000, and a Labor Department report showed that the number of U.S. workers on jobless benefits rolls was the highest since December 1982.

AT&T and DuPont on Thursday led the list of blue-chip U.S. companies laying off workers in the weeks before the Christmas holidays.

European central banks cut interest rates on Thursday to try to restore some vitality to their feeble economies, many of which are already in recession.

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Sweden's central bank cut by a record 175 basis points, the European Central Bank cut by 75 points and the Bank of England cut by 100 points.

Oil producer group the Organization of the Petroleum Exporting Countries will consider another round of output curbs to try to defend prices when it next meets on Dec. 17 in Algeria.

"It is obvious that the market is oversupplied,'' said Iran's OPEC governor Mohammad Ali Khatibi. "If you remove oversupply and produce exactly what the market needs, it would be good for everybody.''

Oil rose briefly Wednesday when U.S. Energy Information Administration data revealed an unexpected fall in fuel inventories last week in the world's top energy consumer.

But U.S. refinery utilization fell 1.9 percentage points to 84.3 percent of capacity against a predicted rise of 0.2 percentage point, pointing to weak demand.

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