NEW YORK - Oil prices fell nearly 5 percent to below $47 a barrel on Tuesday, down $100 from their peak, driven down by a gloomy economic outlook and news that OPEC made only two-thirds of its pledged supply cuts in November.
U.S. crude settled at $46.96 a barrel, down $2.32, or 4.71 percent, the lowest settlement since May 2005.
London Brent settled at $45.44 a barrel, down $2.53.
Crude prices have now fallen from a record $147.27 a barrel struck in July as the mushrooming global economic crisis hits demand in the United States and other large consuming nations.
"Fears of a deep global recession continue to linger over the markets like a dark cloud as traders try to ascertain not only the deepness of the slowdown but how long it will take for the recovery to take hold," said Chris Jarvis, senior analyst, Caprock Risk Management in Hampton Falls, New Hampshire.
"As a result, crude oil remains on its slippery slope, looking for direction and a bottom as is the case with the majority of the asset classes."
In September, U.S. oil demand fell to its lowest level for any month in more than a decade, the U.S. Energy Information Administration said last week.
Members of the Organization of Petroleum Exporting Countries had pledged to lower output by 1.5 million barrels per day for November in order to prop up prices, but were only 66 percent compliant with the target last month, a Reuters survey showed on Tuesday.
OPEC's decision to wait until later this month to take more supply off the market, combined with a steep sell-off in U.S. stocks, led to a drop of more than 9 percent in U.S. crude oil futures on Monday.
Benchmark U.S. stock indexes were up more than 3 percent on Tuesday as investors hunted for bargains amid optimism that the government will bail out the U.S. auto industry.
OPEC CUTS
OPEC members remained concerned about oversupply in the world oil market and may decide to cut output further at their next meeting in Algeria on December 17.
"We are concerned about the glut ... I think there is an indication that we will have another cut," Qatar Oil Minister Abdullah al-Attiya said.
Top oil exporter Saudi Arabia has highlighted $75 a barrel as a "fair price" for oil.
Meanwhile, sources said two OPEC members, the United Arab Emirates and Kuwait, will increase oil sales to many major Asian customers, sending mixed signals about OPEC output cuts.
More bearish news for oil prices could be in store on Wednesday, when the U.S. government reports weekly oil inventory data.
A Reuters poll of analysts showed U.S. crude inventories likely rose by 1.7 million barrels last week, a third consecutive weekly build, as imports continued to increase.
U.S. crude settled at $46.96 a barrel, down $2.32, or 4.71 percent, the lowest settlement since May 2005.
London Brent settled at $45.44 a barrel, down $2.53.
Crude prices have now fallen from a record $147.27 a barrel struck in July as the mushrooming global economic crisis hits demand in the United States and other large consuming nations.
"Fears of a deep global recession continue to linger over the markets like a dark cloud as traders try to ascertain not only the deepness of the slowdown but how long it will take for the recovery to take hold," said Chris Jarvis, senior analyst, Caprock Risk Management in Hampton Falls, New Hampshire.
"As a result, crude oil remains on its slippery slope, looking for direction and a bottom as is the case with the majority of the asset classes."
In September, U.S. oil demand fell to its lowest level for any month in more than a decade, the U.S. Energy Information Administration said last week.
Members of the Organization of Petroleum Exporting Countries had pledged to lower output by 1.5 million barrels per day for November in order to prop up prices, but were only 66 percent compliant with the target last month, a Reuters survey showed on Tuesday.
OPEC's decision to wait until later this month to take more supply off the market, combined with a steep sell-off in U.S. stocks, led to a drop of more than 9 percent in U.S. crude oil futures on Monday.
Benchmark U.S. stock indexes were up more than 3 percent on Tuesday as investors hunted for bargains amid optimism that the government will bail out the U.S. auto industry.
OPEC CUTS
OPEC members remained concerned about oversupply in the world oil market and may decide to cut output further at their next meeting in Algeria on December 17.
"We are concerned about the glut ... I think there is an indication that we will have another cut," Qatar Oil Minister Abdullah al-Attiya said.
Top oil exporter Saudi Arabia has highlighted $75 a barrel as a "fair price" for oil.
Meanwhile, sources said two OPEC members, the United Arab Emirates and Kuwait, will increase oil sales to many major Asian customers, sending mixed signals about OPEC output cuts.
More bearish news for oil prices could be in store on Wednesday, when the U.S. government reports weekly oil inventory data.
A Reuters poll of analysts showed U.S. crude inventories likely rose by 1.7 million barrels last week, a third consecutive weekly build, as imports continued to increase.
