SINGAPORE – Oil prices fell to 17-month lows below $62 a barrel Monday in Asia as investors brushed off OPEC's output cut, focusing instead on growing evidence of a severe global economic slowdown that would undermine crude demand.
Light, sweet crude for December delivery declined $2.19 to $61.96 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore, the lowest since May 2007.
In London, November Brent crude was down $2.34 cents to $59.71 a barrel on the ICE Futures exchange.
On Friday — even after the Organization of Petroleum Exporting Countries announced a 1.5 million barrel-a-day cut — oil fell $3.69 to settle at $64.15. Prices have plunged 57 percent from a record $147.27 on July 11.
"The mood is fairly negative reflecting worry about the international economic outlook," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. "If there is further weak economic data in the U.S. or Europe, prices could come under more downward pressure."
Iran's OPEC governor Mohammad Ali Khatibi said Sunday a reduction in production "will be considered" at the group's next meeting in Algiers in December — a meeting that might even be held early if necessary.
"I thought the OPEC cut was a fairly decisive act, but concerns of recession in the major economies remain dominant," Moore said. "OPEC's cut does take a step toward tightening the market."
Investors have been paying close attention to signs that a slowing economy and higher gasoline prices earlier this year have hurt crude demand in the U.S., the world's largest oil consumer.
The U.S. Department of Transportation said Friday that Americans drove 5.6 percent less, or 15 billion fewer miles (24 billion fewer kilometers), in August compared with same month a year ago — the biggest single monthly decline since the data was first collected regularly in 1942.
Oil investors have also been eyeing stock markets to gauge sentiment on global economic health. Nearly all Asian stock indexes fell Monday, led by Japan, Hong Kong and the Philippines. South Korean shares rebounded slightly after plummeting last week.
The Dow Jones industrial average fell 3.6 percent Friday.
"If we're looking a severe economic downturn, it's hard to say what the bottom of any commodity price will be," Moore said.
In other Nymex trading, gasoline futures fell 0.45 cent to $1.47 a gallon, while heating oil fell 0.28 cent to $1.94 a gallon. Natural gas for November delivery fell 19.6 cents to $6.04 per 1,000 cubic feet.