AP
 
Singapore, Feb 17: Oil prices fell below USD 37 a barrel on Tuesday in Asia as a deepening global slowdown weighed on expectations for crude demand. 

Light, sweet crude for March delivery fell 76 cents to USD 36.75 a barrel by midday in Singapore on the New York Mercantile Exchange after settling at USD 37.51 on Friday. The contract rose 11 cents yesterday in Asian and European trading while US markets were closed for the Presidents Day holiday.

Prices have fallen 75 per cent since peaking at USD 147.27 in July as a credit crisis in the US sub-prime mortgage sector has mushroomed into the worst global economic downturn in decades.

So far this year, US companies have shed hundred of thousands of jobs, dragging down consumer confidence. US crude inventories have soared in recent weeks, reflecting a pull back in spending despite a drop in gasoline prices.

Japan, the world's second-biggest economy, is also hurting. It said yesterday its economy shrank 3.3 per cent in the fourth quarter from the previous quarter, the worst performance since 1974.

"The economic and inventory data paint a bleak picture for oil demand," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "Since the beginning of the year, the outlook has worsened."