new york (Bloomberg) — Crude oil futures fell below $34 a barrel in New York on forecasts faltering global economic growth will drive down fuel consumption for a second year.

Goldman Sachs Group Inc., which expects demand to fall by about 1.6 million barrels a day this year, says that prices will rebound after slumping to about $30 a barrel. That's more than three times the demand drop forecast by the International Energy Agency. The Organisation of Petroleum Exporting Countries may have to cut output again should prices fall further, Algerian Oil Minister Chakib Khelil said over the weekend.

"Demand is falling faster than oil producers are cutting production," said Thina Saltvedt, an oil analyst at Nordea Bank AB in Oslo. "As long as Opec is one step behind, prices will continue to fall."

Crude oil for February delivery fell as low as $33.89 a barrel in electronic trading on the New York Mercantile Exchange, and was down $1.89 at $34.62 at 2.52 p.m. local time. There was no floor trading in New York yesterday because of the Martin Luther King Day holiday.

The Nymex February contract expires at the end of trading tomorrow. The more-actively traded March contract dropped $1.67 to $40.90.

"There's light trading volume and the economic numbers are bearish globally," said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. "The negative news coming out of Europe is pressuring the oil market."

Stocks in Europe, Brazil and Canada fell as investors speculated government efforts to shore up the financial industry will fail to stem the deepening global recession.

"The equity markets are soft and the contract expires tomorrow, so I would take today's crude oil price with a grain of salt," Jarvis said.

The settlement yesterday of a dispute over natural gas between Russia and Ukraine, which caused shortages of the fuel in Europe, and a cease-fire in the Gaza Strip also brought selling pressure on oil futures, said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

"There was a reduction of the geopolitical risk premium," he said in a telephone interview. "That has prompted some of the selling we've seen today."