Crude oil futures closed lower yesterday as US Treasury Department said it would lend funds to the auto industry after a rescue plan went aborted in the Senate on Thursday night.

The collapse of the auto bailout plan had escalated fears that a worsening recession will hurt energy demand.

The Bush administration said on Friday that it will consider its options to save the U.S. automobile industry, including tapping the US$700 billion in funds under the Troubled Asset Relief Program.

Crude oil for January delivery fell US$1.70 to end at US$46.28 a barrel on the New York Mercantile.

General Motors Corp., Chrysler LLC and Ford Motor Co. failed to secure US$14 billion in emergency loans after efforts collapsed in the Senate late Thursday. The Senate rejected the bailout 52-35 on a procedural vote.

Further fueling the bearish sentiment, Goldman Sachs -- which had once predicted 200-dollar-a-barrel oil -- slashed its average price forecast for 2009 to US$45 a barrel from a prior projection of 80 dollars.

OPEC is widely expected to agree on a cut in member nations' quotas at its meeting next Wednesday in Oran, Algeria. In October, the oil cartel announced a production cut of 1.5 million barrels a day, but left output levels unchanged at its November meeting.