Oil tumbles to 17-month low of below $62

London Brent crude was down $1.75 to $60.30.

Gloom about the world economy overshadowed OPEC’s deal on Friday to chop output by 1.5 million barrels per day, which some traders have said will not be enough to arrest the price slide.

“I think OPEC has actually taken a fairly decisive step to cut production but the oil market is obviously just focusing on economic woes at the moment,” said David Moore, a commodities strategist at the Commonwealth Bank of Australia.

Oil prices have more than halved since they hit a record high of $147 a barrel in July.

Demand is falling in the United States, the world’s top energy consumer and other industrial countries as the credit crisis infects the wider economy and begins to spread to emerging markets.

Signs of a sharp slowdown in Europe and a barrage of profit warnings and job cuts from companies worldwide have intensified fears of deep global recession.

Investors around the world are trying to find shelter, contributing to heavy losses on Asian, European and US stock markets.

Evidence of weakening oil demand is increasing.

Japan’s top refiner Nippon Oil said it would cut production by 15 per cent in November versus last year while data showed China’s September oil demand rose by just over 2 per cent, its slowest pace in 10 months.

Oil traders will now watch for signs that the Organization of the Petroleum Exporting Countries is implementing its cuts. Asian oil refiners said on Monday they had yet to receive notice of curbs on their Gulf crude oil shipments, but most were bracing for a likely 5 per cent cut.