Oil falls to 8-month low

Oil fell below $90 a barrel today to its lowest in eight months, pressured by expectations that the global credit crisis will bring a sharp fall in oil demand.

U.S. light crude for November delivery fell $3.85 a barrel to $90.03, its fourth day of losses.

It touched a session low of $89.07, its lowest since early February. Prices have dropped nearly 40 percent from a peak of $147.27 on July 11.

London Brent crude was down $3.44 at $86.81 a barrel.

"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 United States, 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 analyst at ANZ.

"You would expect the market is now joining the dots and thinking ... this will probably flow through to China."

U.S. and European governments are trying to underpin the financial sector but this has so far failed to reassure investors.

The United States has passed a $700 billion financial rescue plan, while European governments have offered guarantees to savers, as well as coming to the aid of troubled banks.

But European shares were down more than 5 percent on Monday, following on from heavy losses in Asian markets.