Oil dropped more than 5% to below $42 per barrel today, touching a four-year low after a US report showed the heaviest job losses in 34 years in the world's top energy consumer.
US crude plunged $2.39 to $41.28 by 6.30pm after touching $40.81, the lowest since December 2004. London Brent crude traded down $2.54 to $39.74 a barrel.
Analysts have slashed price and demand forecasts on the mounting economic gloom, with Merrill Lynch predicting oil could drop to $25 a barrel if the global recession extends to China.
The International Energy Agency lowered its forecast for global annual demand growth to 1.2% from 1.6% in its previous forecast, with increases from China and other emerging economies outweighing loses in developed markets.
OPEC President Chakib Khelil told Algerian state television yesterday that the oil-producing group should cut oil output by a significant amount at the meeting if prices remain at their current level.
The cartel has already agreed to slash supplies by 2 million barrels per day to help prop up prices.
