Crude Below $60 on Economic Worries

Light, sweet crude for December delivery was recently down $1.63, or 2.8%, at $57.70 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange traded down $1.40 at $54.31 a barrel.

Nymex crude last traded lower on March 20, 2007. It has fallen nearly $90 from its all-time trading high of $147.27, reached July 11.

Oil's sharp turnaround came as demand slumped in industrialized countries and investors sold off commodities to raise cash as they face a worldwide financial crisis. It has stayed lower as forecasts for the world economy darken, with some analysts suggesting world oil demand could contract next year for the first time since 1983.

In China, a bulwark of world demand growth, the government this week reported oil product imports in October fell to their lowest level in at least two years.

"You have some supportive news, but instead the market continues to focus on the negatives," said Tom Bentz, a broker and analyst with BNP Paribas Commodity Derivatives in New York. Among the news the oil market seemed to look past was a report that Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, had test fired a new type of ground-to-ground missile, Bentz said.

"We're caught up in the same old bearish mood -- economic concerns and weaker demand. The market is not showing any signs of a bottom yet," Bentz said.

Lower prices have pressured national budgets in a number of key oil exporters. Members of OPEC, which produces about four in every 10 barrels the world consumes, have started talking about a meeting before the group's scheduled Dec. 17 gathering in Algeria. Last month OPEC agreed to curtail output by 1.5 million barrels a day, to 27.3 million barrels a day.

Oil's slide threatens to derail long-term investments in new supply. The International Energy Agency, an advisor to 28 industrialized countries, on Wednesday warned oil project delays recently announced by several companies raise the specter of new crude supply problems by 2010.

"We see and hear about energy investments being delayed .. This is a major worry and could lead to a supply crunch and much higher oil prices than we've seen before," IEA chief economist Fatih Birol said as the agency released its long-term global energy outlook.

Front-month December reformulated gasoline blendstock, or RBOB, fell 2.69 cents, or 2.1% to $1.2790 a gallon. December heating oil fell 5.84 cents, or 3%, to $1.8706 a gallon.

-- Gregory Meyer, Dow Jones Newswires