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NEW YORK: Oil prices fell on Tuesday in a market awash in worries over the slowing global economy and its negative impact on energy demand.
On the New York Mercantile Exchange, light sweet crude for December dropped 56 cents to close at 54.39 dollars.
In post-market trade, the New York contract slid to 53.96 dollar, a new low since January 2007.
In London, Brent North Sea crude for delivery in January settled 47 cents lower at 51.84 dollars a barrel on the InterContinental Exchange.
"Oil is being overwhelmed with the weight of the global economy and is finding it hard to stand on its own," said Phil Flynn, analyst at Alaron Trading.
Weighing on sentiment was a forecast by the Centre for Global Energy Studies (CGES) that global demand would contract this year for the first time in 25 years amid a severe global economic slowdown.
"Global oil demand is expected to contract in 2008 for the first time for a quarter of a century," London-based CGES said in its latest monthly report published on Tuesday.
"OPEC's emergency agreement last month to cut production by 1.5 million barrels per day has so far failed to halt the price slide and will not do so until real output cuts have been implemented."
The Organisation of the Petroleum Exporting Countries (OPEC), which produces 40 percent of world oil, has so far failed to fully implement its output cut set to have begun on November 1, according to analysts.
"Oil demand forecasts continue to be revised downwards and a year-on-year contraction in global oil demand in 2008 and 2009 is now a very real possibility for the first time for 25 years," CGES said.
"The path of oil prices will depend on how, and how quickly, OPEC cuts production in response to the falling demand for its oil," it added.
Iran, OPEC's number-two oil producer, said over the weekend that it backs a new output of 1.0-1.5 million barrels a day. The organisation will next meet on November 29 in Cairo, followed by a summit in Oran, Algeria, two weeks later.
OPEC said on Monday that it was ready to intervene on a regular basis to help prop up the market.
Oil prices have plunged almost two-thirds since striking record highs above 147 dollars in July as a global economic slowdown dents world energy demand. - AFP/de
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