Oct. 28 (Bloomberg) -- Crude oil fell, closing at a 17-month low in New York, after a report showed that U.S. consumer confidence dropped to the weakest level on record in October.

Oil dropped after a Conference Board report showed the lowest confidence reading since records began in 1967. The Organization of Petroleum Exporting Countries' secretary-general said the group may call a new meeting if prices fail to react to the 1.5 million-barrel-a-day output cut it announced last week.

``Until you see a change in economic sentiment, there won't be any sustained rallies in the oil market,'' said Kyle Cooper, an analyst at IAF Advisors in Houston. OPEC ``can announce all the cuts they like and the market will ignore it.''

Crude oil for December delivery fell 49 cents, or 0.8 percent, to settle at $62.73 a barrel at 2:42 p.m. on the New York Mercantile Exchange, the lowest closing price since May 16, 2007. Prices have tumbled 57 percent since reaching a record $147.27 on July 11.

Futures in after-hours electronic trading climbed along with U.S. stocks. Prices rose $1.15, or 1.8 percent, to $64.37 a barrel at 4:02 p.m. Floor trading in New York ends at 2:30 p.m. and electronic trading ceases at 5:15 p.m.

Stocks rallied and the Dow Jones Industrial Average posted its second-best point gain ever as the cheapest valuations in 23 years lured investors and increased commercial-paper sales signaled credit markets are thawing. The Dow climbed 889.35, or 11 percent, to 9,065.12.

Confidence Drops

Household wealth has evaporated as stocks tumbled last month, home equity shrank and job losses mounted. The dimming outlook signals consumer spending, which accounts for more than two-thirds of the U.S. economy, will deteriorate further, deepening the slump.

U.S. gasoline use fell 6.4 percent last week from a year earlier as lower prices at the pump did little to stimulate demand, a MasterCard Inc. report today showed. It was the 27th consecutive weekly decline.

OPEC's decision last week to trim production for the first time in almost two years failed to stop prices from falling.

``If circumstances dictate we have another meeting, of course we will meet,'' OPEC Secretary-General Abdalla el-Badri said at the Oil & Money conference in London. He said he expects a market response to last week's output cut after about a week.

Shokri Ghanem, chairman of Libya's National Oil Corp., echoed el-Badri's comments, saying he's watching the market to see whether it's deteriorating or stabilizing.

``The talk of another OPEC cut is being taken by the market as a sign of weakness,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``There are doubts that they can cut much more than 1.5 million to 2 million barrels a day. Compliance is going to be a big problem, given the desperation of some countries for cash.''

U.S. Inventories

The U.S. Energy Department will probably report tomorrow that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.

Brent crude oil for December settlement declined $1.12, or 1.8 percent, to settle at $60.29 a barrel on London's ICE Futures Europe exchange, the lowest settlement since March 20, 2007.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: October 28, 2008 16:31 EDT