Oil back below $40

Due to continuing concerns that the recession is cutting into demand, crude prices head lower, despite news that Saudi Arabia plans to cut output below its target levels.

LONDON (Reuters) -- Oil fell more than $2 to below $39 a barrel on Monday, dragged down by growing evidence that recession is reducing global energy consumption.

The decline came despite news that Saudi Arabia planned to cut output to below its agreed target, as well as gas supply disruptions in Europe as a result of the Russia-Ukraine dispute and tensions in the Middle East.

By 8:35 ET, U.S. light crude for February delivery fell more than 6% or $2.58 to a low of $38.25.

U.S. jobless data on Friday set the tone for the market.