By Mark Shenk

Jan. 17 (Bloomberg) -- Crude oil fell to the lowest in more than a month on concern the U.S. economy may slip into recession, cutting fuel demand in the world's biggest energy consumer.

Builders in the U.S. broke ground on 1.006 million houses in December, the lowest since 1991, following a 1.173 million pace the prior month, the Commerce Department said today. Starts were down 25 percent in 2007, the biggest decline since 1980. The U.S. consumes almost 25 percent of the world's oil.

``The major driver of the market is the fear that we may already be in a recession,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``There will be significant demand destruction if there is a recession in the U.S.''

Crude oil for February delivery fell 71 cents, or 0.8 percent, to $90.13 a barrel at 2:48 p.m. on the New York Mercantile Exchange, the lowest close since Dec. 11. Oil reached a record $100.09 a barrel on Jan. 3. Prices are up 73 percent from a year ago.

Brent crude for March settlement fell 75 cents, or 0.8 percent, to settle at $88.75 a barrel on London's ICE Futures Europe exchange. It was the lowest close since Dec. 10. Futures touched $98.50 on Jan. 3, the highest intraday price since trading began in 1988.

Prices rose earlier today after Iran's oil minister said there is no need for the Organization of Petroleum Exporting Countries to increase supply at its Feb. 1 meeting. Prices also climbed on speculation that cold weather in the next week will bolster U.S. heating-oil consumption.

`Economic Malaise'

``The market continues to be battered by news of economic malaise,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``The path of least resistance remains down.''

Manufacturing in the Philadelphia region contracted more than forecast in January to a six-year low, adding to evidence factories are throttling back as the economy slows. The Philadelphia Federal Reserve Bank's general economic index declined to minus 20.9, the lowest reading since October 2001, from minus 1.6 in December, the bank said today.

Federal Reserve Chairman Ben S. Bernanke said that the outlook for growth in 2008 ``has worsened'' and ``the downside risks to growth have become more pronounced'' in testimony to the House Budget Committee.

In a question-and-answer period initiated by Budget Committee Chairman Rep. John Spratt, a South Carolina Democrat, Bernanke said the Fed is ``not forecasting a recession'' for this year.