* Oil slumps nearly 4 pct to lowest since February
* Credit crisis feared hitting demand, dollar gains vs euro
* Iran says $100 is too low, market oversupplied
(Updates with prices at eight-month low)
By Jonathan Leff
SINGAPORE, Oct 6 (Reuters) - Oil prices tumbled nearly 4
percent amid a commodities-wide rout on Monday, falling to
their lowest since February as traders feared efforts to
contain a growing credit crisis would fail to stave off a
sharper decline in oil demand.
After Friday's passage of a landmark U.S. $700 billion
bailout bill seemed to quell, for now, weeks of U.S.-centred
turmoil, the focus shifted to Europe where officials scrambled
at the weekend to save three banks and offered different ways
to soothe the frayed nerves of investors and savers.
U.S. light crude for November delivery <CLc1> tumbled $3.39
a barrel or 3.6 percent to $90.49 by 0711 GMT, a fourth day of
losses that deepened last week's 12 percent slump, the market's
biggest such loss in almost four years. Earlier in the day, it
fell 3.8 percent to as low as $90.27.
London Brent crude <LCOc1> dropped $3.25 to $87.00 a
barrel.
"There's a growing perception that the bailout package will
put a further drag on U.S. growth, and that really this is just
a Band-Aid initiative to bail out Wall Street," said Mark
Pervan, senior commodities analyst at ANZ.
The U.S. dollar's rise to a 13-month high versus the euro
added to pressure on beleaguered commodities, which slumped
more than 10 percent last week in their biggest-ever weekly
loss. <.CRB> Asian stocks tumbled by around 5 percent on
Monday.
Oil demand in the world's top consumer has already slumped
this year under the weight of record prices, while consumption
in Japan and Europe has also weakened, knocking crude off a
record peak over $147 a barrel struck in July.
Traders may begin to fear next for China, whose rapid
growth helped trigger oil's rise from just $20 a barrel in
2002.
"I think the market's starting to build this into prices,"
said Pervan. "You would expect the market is now joining the
dots and thinking ... this will probably flow through to
China."
Though the United States bought breathing room in the
credit crisis with a series of takeovers and bailouts, Europe
fought at the weekend to contain the fallout.
Germany said it would guarantee more than 500 billion euros
($693 billion) in private deposit accounts to protect savers
from the worst financial crisis since the 1930s. Austria and
Denmark quickly followed suit. []
German officials clinched a rescue deal for lender Hypo
Real Estate <HRXG.DE>, Belgium and Luxembourg found a buyer for
Fortis <FOR.BR> in BNP Paribas, and UniCredit <CRDI.MI>,
Italy's second-biggest bank, announced plans to raise capital.
[]
Just a day after leaders of Europe's four biggest economies
decided against a coordinated bank bailout, Italian Prime
Minister Silvio Berlusconi said Italy would revive the idea at
a meeting of finance ministers on Monday, but Germany then said
it remained opposed to such a measure.
With prices sliding anew, one of OPEC's most consistent
price hawks, Iran, said $100 a barrel was too low and urged
members of the Organisation of the Petroleum Exporting
Countries (OPEC) to respect their quotes to prevent oversupply
from worsening.
"With the OPEC decision to cut, oversupply could be
controlled in the first quarter of 2009," said Oil Minister
Gholamhossein Nozari, referring to OPEC's agreement last month.
"But if they (OPEC members) do not carry out the cut,
oversupply could reach 1.2 million bpd." []
OPEC oil supply fell in September, the first monthly
decline since April, thanks to disruptions from two of its
African members and lower shipments from Iran and Saudi Arabia,
a Reuters survey showed on Friday. []
But ANZ's Pervan warned that OPEC's influence was limited
in a market being driven more by demand fears than supply
concerns.
"I have (oil's floor) at $80 now, but there are risks it
could move down to $60," he said.
(Editing by Ben Tan)
