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London: Oil was near $90 a barrel on Monday after falling to its lowest in eight months earlier in the session, pressured by expectations the global credit crisis will bring a sharp drop in oil demand.
US light crude for November delivery fell by $3.84 a barrel to $90.04 by 1424 GMT, its fourth day of losses.
It touched a session low of $88.89, its lowest since early February. Prices have dropped by nearly 40 per cent from a peak of $147.27 on July 11.
London Brent crude was down $3.86 at $86.39.
"The prevailing macro sentiment is now crystallising around the notion that we are heading into a synchronised global slowdown, a mirror image of the across-the-board expansion we saw from 2004 to early 2007," said Edward Meir of broker MF Global.
Oil demand in the US, the world's top energy consumer, has slumped this year under the weight of record prices, while consumption in Japan and Europe has also weakened.
There are already questions over China, where rapid economic growth helped trigger oil's rise from just $20 a barrel in 2002.
"I think the market's starting to build this into prices," said Mark Pervan, senior commodities anal-yst at ANZ.
"You would expect the market is now joining the dots and thinking... this will probably flow through to China."
US and European governments are trying to underpin the financial sector but this has so far failed to reassure investors. The US has passed a rescue plan, while European governments have offered guarantees to savers.
But European shares fell more than five per cent and the Dow Jones industrial average was down nearly three per cent, following on from heavy losses in Asian markets.
The dollar was up strongly versus the euro, which added to pressure on commodities, which are mostly priced in the US currency.
Commodities: Gold rises nearly 5%
Gold prices rose nearly five per cent on Monday, leading other precious metals higher, as a slide in stock markets sparked a flight to safety.
In euro terms, the metal reached 645.33 euros an ounce, its strongest since late March, when it hit a record high of 651.54.
Traders largely shrugged off the effects of a firmer dollar and weaker oil prices - usually the main external drivers of gold - which should have pressured the metal lower. Platinum, silver and palladium all posted gains in gold's wake.
Spot gold was quoted at $873.50/$875.50 an ounce at 1413 GMT, up from $834.80 in late New York trade on Friday.
"There is a flight to gold as a safe haven again today, which is supporting prices," said Dresdner Kleinwort consultant Peter Fertig.
"The factors which normally drive gold are heading lower, except the stock markets, and the rising risk aversion of investors."
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