NEW YORK, Dec. 19 (Xinhua) -- Crude-oil futures closed lower on Friday as an OPEC production cut and the U.S. auto industry bailout plan failed to offset worries over the slumping oil demand.

Light, sweet crude for January delivery, which expires on Friday, fell 2.35 dollars, or 6.5 percent, to settle at 33.87 dollars a barrel on the New York Mercantile. It was the lowest level since February 2004.

The February contract, which begins its front-month run on Monday, rose 69 cents to settle at 42.36 dollars a barrel with much higher trade volume as compared to the January contract.

On Friday, Brent North Sea crude for delivery in February rose 90 cents to 44.26 dollars a barrel at London's Inter Continental Exchange.

Conley Turner, Wall Street Strategies' senior research analyst, told Xinhua that while short term visibility for an improvement in the demand picture is poor, longer term is likely to see some improvement. "This is being reflected in the February crude futures trading above 40.00 dollars per barrel," he said.

It is safe to assume that the oil has become somewhat oversold at this level, Turner said. "That does not mean that it cannot or will not go any lower, but the sentiment is building that there are more chances for a comeback from these lower levels than additional steep declines," he added.

The White House announced on Friday a rescue plan of multi-billion dollars in emergency loans to bail out the country's crippled auto industry from bankruptcy. Oil prices showed little reaction to the announcement.

OPEC announced on Wednesday a further output cut of 2.2 million barrels per day starting Jan. 1, 2009, in a bid to stabilize the plunging oil prices. But the market seems to shrug off the oil cartel's record supply cut, as to many dealers the amount is inadequate to turn the bearish sentiment around, and the market is also skeptical about the compliance of OPEC members on production cut.
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