SINGAPORE - Oil plunged as much as 3 percent to a fresh eight-month low below $88 a barrel in a cross-asset sell-off on Wednesday on growing concerns the world's biggest financial crisis since the Great Depression would hurt demand.
Even Britain's effort to kickstart stalled money markets by injecting capital into its biggest retail banks and Hong Kong's interest rate cut failed to lift the sentiment of oil investors, who have knocked prices nearly $60 lower since July.
U.S. light crude for November delivery fell $2.47 to $88.59 a barrel by 3:09 a.m. EDT, reversing the previous day's rise. Prices touched an intraday low of $87.37, the lowest since early February.
London Brent crude fell $2.14 to $82.52 a barrel.
Underlining the impact of the financial crisis on fuel use, the U.S. Energy Information Administration cut its oil demand growth outlook for next year by 15 percent from a forecast made last month, blaming the "deteriorating" global economy.
"I see the market falling to $86 in the next several weeks," said Anthony Nunan, a risk management executive at Tokyo-based Mitsubishi Corp. "We need some stabilization in the stock market or an OPEC cut or both."
Shares in Tokyo .N225 plunged more than nine percent, the biggest decline since the 1987 stock market crash, on growing fears that the credit chaos will foster a global recession.
Signs that members of the Organization of the Petroleum Exporting Countries (OPEC) are becoming uneasy following oil's recent sharp price drop also failed to hold up prices on Wednesday, following a $2 a barrel rise on Tuesday.
OPEC, which pumps two in every five barrels of oil, next meets in Algeria in December.
Further pressure on prices could come from U.S. crude oil inventories data due out later on Wednesday.
Crude stocks probably rose for the second week in a row last week as imports continued to rebound from storm disruptions, a Reuters poll of 11 analysts showed.
Even Britain's effort to kickstart stalled money markets by injecting capital into its biggest retail banks and Hong Kong's interest rate cut failed to lift the sentiment of oil investors, who have knocked prices nearly $60 lower since July.
U.S. light crude for November delivery fell $2.47 to $88.59 a barrel by 3:09 a.m. EDT, reversing the previous day's rise. Prices touched an intraday low of $87.37, the lowest since early February.
London Brent crude fell $2.14 to $82.52 a barrel.
Underlining the impact of the financial crisis on fuel use, the U.S. Energy Information Administration cut its oil demand growth outlook for next year by 15 percent from a forecast made last month, blaming the "deteriorating" global economy.
"I see the market falling to $86 in the next several weeks," said Anthony Nunan, a risk management executive at Tokyo-based Mitsubishi Corp. "We need some stabilization in the stock market or an OPEC cut or both."
Shares in Tokyo .N225 plunged more than nine percent, the biggest decline since the 1987 stock market crash, on growing fears that the credit chaos will foster a global recession.
Signs that members of the Organization of the Petroleum Exporting Countries (OPEC) are becoming uneasy following oil's recent sharp price drop also failed to hold up prices on Wednesday, following a $2 a barrel rise on Tuesday.
OPEC, which pumps two in every five barrels of oil, next meets in Algeria in December.
Further pressure on prices could come from U.S. crude oil inventories data due out later on Wednesday.
Crude stocks probably rose for the second week in a row last week as imports continued to rebound from storm disruptions, a Reuters poll of 11 analysts showed.
