OIL AT 22-MONTH LOW WITH DEMAND UNDER SCRUTINY

SAN FRANCISCO (MarketWatch) - Crude futures closed at their lowest level in 22 months Monday, after an erratic trading session that took prices to a high near $59 per barrel, with energy demand under fresh scrutiny following a climb in U.S. industrial output and data showing that the Japanese economy has fallen into recession.

And likely adding to the session's volatility was the expiration of December crude-oil options, analysts said.

'Overall, the market just keeps doing what it has been doing for months -- posting wide trading ranges with a lot of activity, but not quite able to break out of its downtrend,' said Darin Newsom, a senior analyst at DTN. 'The big thing is still a lack of demand and financial weakness.'

December crude futures fell by $2.09, or 3.7%, to close at $54.95 per barrel on the New York Mercantile Exchange. It finished at the session's weakest intraday level - a level not seen since late January of 2007."