Oil futures fell Tuesday on mounting concerns that the U.S. economy may be heading toward a recession that would dampen demand for crude, according to The Associated Press. While the Federal Reserve's interest rate cut helped crude futures recover from much steeper earlier losses, many investors doubt the move will stave off a serious slowdown. «Whenever you see a rate cut of that magnitude between (Fed) meetings ... it conjures up images of desperation,» said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois. Light, sweet crude for February delivery fell 72 cents to settle at $89.85 a barrel on the New York Mercantile Exchange; earlier, prices had fallen as low as $86.11. Oil last traded that low on Dec. 6. The February contract expired at the close of trading. March crude fell 71 cents to settle at $89.21 a barrel. The Fed cut the federal funds rate _ the interest that banks charge each other on overnight loans _ by three-quarters of a percentage point to 3.5 percent. It was the biggest single cut of its kind in recent memory. The Fed was responding to concerns about a possible recession that have sent global equities markets sharply lower in recent days. The Nymex and other financial markets in the U.S. were closed Monday for the Martin Luther King Jr. holiday. On Tuesday, the Dow Industrials fell sharply, though they might have fallen further had the Fed not acted. Oil futures recovered from earlier losses because the Fed move appeared to stabilize stocks, analysts said.
