* Credit crisis fallout seen hitting oil demand
* Concerns contagion could spread to Chinese consumption
* Global stocks markets tumble
(Updates throughout, changes dateline from LONDON)
NEW YORK, Oct 6 (Reuters) - Oil dropped more than $4 to
below $90 a barrel on Monday on expectations the growing
financial crisis will further slow already faltering global
fuel demand.
U.S. crude <CLc1> traded down $4.40 to $89.48 a barrel at
12:09 p.m. EDT (1609 GMT) after earlier touching $88.89, the
lowest level since early February. London Brent crude <LCOc1>
fell $4.50 at $85.75 a barrel.
Crude prices have dropped nearly 40 percent from a peak
over $147 a barrel 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.
Oil demand in the United States, the world's top energy
consumer, has slumped this year under the weight of record
prices, while consumption in Japan and Europe has also
weakened.
Analysts are now eyeing demand from China -- which helped
fuel a six-year rally in commodities -- for signs the crisis is
hitting consumption.
The world's second biggest consumer will not import
gasoline for the second straight month and instead export the
fuel due to heavy domestic stockpiles and a dip in demand.
[]
"I think the market's starting to build this into prices,"
said Mark Pervan, senior commodities analyst at ANZ.
"You would expect the market is now joining the dots and
thinking ... this will probably flow through to China."
The U.S. and European governments are trying to underpin
the financial sector but this has so far failed to reassure
investors.
U.S. stocks fell on Monday, with the Dow diving 400 points
to below 10,000 for the first time in four years, as part of a
global sell off on investors fears the widening fallout from
the credit crisis would drag the economy into recession.
[]
European shares suffered their worst one-day percentage
fall on record, sinking to four-year closing lows while trading
in Brazil halted after a 15 percent drop in its benchmark
index. []
With oil prices sliding, OPEC member Iran said $100 a
barrel was too low and urged members of the Organization of the
Petroleum Exporting Countries (OPEC) to respect their output
targets 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 President Chakib Khelil said OPEC would seek to
balance the market when it meets in December.[]
He told Algerian government newspaper El Moudjahid that
demand had declined by an estimated three million barrels per
day as a result of falling requirements in the main consuming
countries, while supply had remained steady.
(Reporting by Matthew Robinson, Gene Ramos and Robert Gibbons
in New York; Jane Merriman and Joe Brock in London and Jonathan
Leff in Singapore; Editing by Marguerita Choy)
