Since Bush lifted the Oil Drilling Ban oil has droped to 90 dollars a barrel

NEW YORK (AFP) — Crude oil nosedived below 90 dollars a barrel Monday as deepening global financial turmoil and plunging stock markets raised fears about slowing demand for energy.

New York’s main contract, light sweet crude for November, plunged 6.07 dollars to close at 87.81 dollars a barrel.

In London, Brent North Sea crude for delivery in November tumbled 6.57 dollars to settle at 83.68 dollars a barrel.

Earlier the two futures contracts had fallen to lows last seen in early February, at 87.56 dollars in New York and 83.36 dollars in London.

Crude futures contracts skidded as global stock markets tumbled after a 700-billion-dollar US financial rescue package signed into law Friday failed to calm investors’ nerves about frozen global credit flows.

“The oil market is trying to find out exactly how it fits into this new world economic of bailouts and global economic turmoil. Oil is not the best hedge against a market meltdown and China and India (demand) will slow,” said Phil Flynn at Alaron Trading.

Crude prices have slumped about 40 percent in three months since they struck record highs of above 147 dollars in July.