LONDON - OIL prices slumped towards 77 dollars (S$113.98) per barrel on Friday, amid a worldwide equities meltdown, with traders convinced that an economic slowdown will hurt energy demand, dealers said.
The International Energy Agency (IEA) also warned that the threat of recession and the ongoing financial crisis would erode oil demand and set back investment in new oilfields.
Brent North Sea crude for November plunged as low as 77.29 dollars in early trade - the first time below 80 dollars in one year - as traders responded to heavy falls on global stockmarkets.
The contract later stood at 77.88 dollars a barrel, down 4.78 dollars from Thursday.
On Friday, New York's main contract, light sweet crude for delivery in November, lost 5.12 dollars to 81.47 dollars a barrel, after earlier touching a low of 81.13.
The sharp falls came despite news that OPEC will hold an emergency meeting next month on the impact of the markets crisis - amid speculation that the crude producers' cartel could cut output to safeguard precious oil revenues.
'The deteriorating outlook for world growth is leading to a violent correction in commodity prices,' said Deutsche Bank analyst Martin Lewis in a research note to clients.
'Further deterioration in the global GDP (gross domestic product) outlook could act as a trigger for lower oil prices,' he said, adding that prices could fall to about 60 dollars per barrel.
The price of crude oil has now slumped by 47 per cent since striking record high points above 147 dollars per barrel on July 11.
Meanwhile, global stock markets suffered another vicious sell-off on Friday, as the ongoing financial crisis showed no signs of easing up, dealers said.
'Crude prices continued to tumble as fear over the uncertain outlook for energy demand continues to be the dominating factor,' said Sucden analyst Nimit Khamar.
'Markets are very much trading on fear, which has overwhelmed (the) fundamentals' of supply and demand, he added.
The 12-nation Organisation of Petroleum Exporting Countries (Opec) announced on Thursday that it would hold an emergency meeting in Vienna on November 18 to discuss the effects of the international financial crisis.
British Prime Minister Gordon Brown said on Friday that a cut in output reportedly being discussed by producing nations would be 'wrong for the world economy'.
'I'm concerned when I hear that the Opec countries are meeting, or about to meet, to discuss cutting production, in other words making the price potentially higher than it should be,' he said.
It would be 'wrong for the world economy ... for Opec to cut production and therefore keep prices high', he added.
The cartel's next regular meeting was scheduled for December 17 in Oran, Algeria.
At its last ordinary meeting on September 9-10, Opec decided to cut its production of 520,000 barrels of oil per day to sustain oil prices above 100 dollars a barrel. Prices have since plunged dramatically.
In a monthly report published on Friday, the Paris-based IEA said that falling demand 'in the face of higher prices is now being perpetuated by weakening economic prospects'.
The IEA, energy policy adviser to major industrialised countries, cut its forecast for demand in the 30-nation OECD area this year by about 360,000 barrels per day.
Overall world demand this year would be 86.5 million barrels per day - a reduction of 240,000 barrels from the previous estimate, to show a rise of 0.5 per cent from last year.
The world forecast for next year was cut by 440,000 barrels per day to 87.2 million barrels per day, showing an annual increase of 0.8 per cent. -- AFP
[Some months ago, there were stories of US motorists who were gathering at gas stations to pray for lower oil prices.Well, I must say they should be even more convince of the power of prayer now. But I'm equally convinced that one should beware of what one wishes for - it might come true but with a sting in its tail. I'm sure between higher oil prices and this financial crisis, higher oil prices are a small price to pay for a richer world. Not that not praying would have averted the crisis.]