Oil slipped further below $64 a barrel on Thursday after the Bank of England cut interest rates by an unprecedented 150 basis points, highlighting deepening fears of a demand-crushing global recession, according to Reuters.
U.S. light crude for December delivery fell $1.60 to $63.70 a barrel by 7:20 a.m. EST. London Brent Crude dropped $1.60 to $60.27, having earlier fallen to a low of $60.00 a barrel.
The falls extended a 7 percent drop in U.S. crude oil the previous session as heightened fears of economic slowdown across the world weighed on sentiment. It fell by $5.23 to settle at $65.30 a barrel on Wednesday.
Growing U.S. fuel stockpiles, which underscored slackening oil demand, dollar strength and a sharp slide in global equities also helped pull oil prices lower.
"Stock markets are taking a bit of a belting and oil`s being dragged down by a broader equity and commodity sell-off," said MF Global global analyst Robert Laughlin.
The euro and sterling both fell against the dollar. Dollar strength tends to lessen demand for dollar-priced commodities.
European equities fell by more than 2 percent, tracking steep declines in U.S. and Asian shares.
Analysts said traders would be eyeing news of key U.S. economic indicators, including a government report on weekly jobless claims due on Thursday at 8:30 a.m. EST and Friday`s unemployment data, to gauge how the economy of the world`s largest energy consumer is faring.
Reports on Wednesday showed U.S. employers cut 157,000 private sector jobs last month, while the service sector contracted sharply as the worst financial crisis in 80 years hammered the world`s largest economy.
News that investment bank Goldman Sachs planned to lay off another 3,200 employees, and that bellwether technology company Cisco warned revenue could fall as much as 10 percent added to the gloom.
U.S. gasoline stocks rose by 1.1 million barrels last week, against analyst predictions for a drop, as demand for the fuel fell 2.3 percent over a four-week period to October 31, the Energy Information Administration (EIA)said.
The EIA said it expected OPEC production to be cut by 1.1 million barrels a day (bpd) by January, which would represent about 70 percent of the cut of 1.5 million bpd agreed by OPEC last month and would be higher than the usual 50 percent compliance with previous cuts.
However, many analysts think OPEC could move to cut output further if prices fall below $60 a barrel, as member nations struggle to balance their budgets following the near 60 percent collapse in oil prices since July.
