Oil dropped more than 6 percent to below $88 a barrel as a global market rout churned concerns that faltering fuel demand could slow further. U.S. crude settled down $6.07 at $87.81 a barrel after hitting an eight-month low of $87.56. London Brent crude fell $6.57 to settle at $83.68 a barrel.
Crude prices have plummeted from a peak over $147 a barrel set on July 11 as high fuel prices and the growing financial crisis slow oil demand in top consumer the United States and other industrialized nations.
“The prevailing macro sentiment is now crystallizing around the notion that we are heading into a synchronized global slowdown, a mirror image of the across-the-board expansion we saw from 2004 to early 2007,” said Edward Meir of broker MF Global.
The drop in prices has caused some concern among OPEC members, while analysts are revising down demand outlook projections.
“Definitely there is worry. When the prices are so volatile, like rising to $140 and then dropping to below $90, it worries everybody,” said Iraq’s Oil Minister Hussain al-Shahristani.
Ecuadorean Oil Minister Galo Chiriboga said OPEC will analyze the impact of the global financial crisis on oil demand and set production levels in accordance.
Iran said $100 a barrel was too low and urged members to respect their output targets to prevent oversupply from worsening.
OPEC President Chakib Khelil said OPEC would seek to balance the market when it meets in December.
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