VIENNA (Austria) - OIL prices slid below US$68 (S$100.54) a barrel on Wednesday, retreating after a US Election Day rally, as expectations a slowing global economy will cut crude demand re-emerged as the market's dominant driver.

Even indications that Opec was enacting its decision to take a daily 1.5 million barrels of crude from the market failed to support prices.

Light, sweet crude for December delivery was down US$2.96 to US$67.57 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The downward trend came despite a rally in Asian stock markets after Democrat Barack Obama claimed a historic victory in US presidential elections.

The contract overnight rose US$6.62 to settle at US$70.53 as the two-year US presidential election campaign wrapped up.

'This is partly just a correction from a very large gain yesterday,' said Mr David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney.

'In the near term, worries about the international economic outlook will be really hard to overcome. The data flow is going to contain a lot of negatives that create pressure on the oil price.'

Economic indicators out of the US this week suggest the world's largest economy may be heading for its worst recession in decades. A Commerce Department report on Tuesday said factory orders fell 2.5 per cent in Sept from Aug, much worse than analysts had predicted.

On Monday, US manufacturers reported poor figures for Oct, showing the worst reading in more than a quarter century, according to the Institute for Supply Management.

The slowdown, which was sparked by a credit crisis that began in the US last year, shows signs of spreading across the world.

Credit Suisse on Monday cut its forecast for growth in China's oil demand next year to nearly zero from 4 per cent on the back of lower economic growth forecasts.

'There are two forces working on the oil price,' Mr Moore said.

'One is fear of weaker consumption and the other is Opec cutting output to wind back surpluses in the market.'

The Organisation of Petroleum Exporting Countries said last month it would cut output quotas by 1.5 million barrels a day along with a 520,000 barrel cut announced earlier. Venezuelan Oil Minister Rafael Ramirez has said Opec, which controls about 40 per cent of world crude oil production, may slash production by at least 1 million barrels daily when it meets next in Dec.

'It's not yet clear that Opec is disciplined in cutting production,' Mr Moore said. 'Compliance will be a key issue going forward.'

But JBC Energy in a market note cited reports of some OPEC cuts being enacted.

'The (Saudi) kingdom has reportedly notified refiners that Nov crude shipments will be around 900,000 ... (barrels a day) ... lower than Aug volumes,' said the Vienna-based JBC.

'Similar reports were also recently heard from Venezuela, Algeria, Qatar, and the UAE.'

Oil prices have fallen by about 55 per cent since peaking at US$147.27 a barrel in mid-Jul.

In other Nymex trading, gasoline futures fell more than 7 cents to fetch US$1.46 a gallon, heating oil plunged more than 8 cents to US$2.08 a gallon and natural gas for Dec delivery fell 10 cents to trade at US$7.12 per 1,000 cubic feet.

In London, December Brent crude fell US$2.17 to US$64.27 on the ICE Futures exchange. -- AP