"OPEC has signaled it may defend $80,"

Oil prices fell to an 8-month low below $90 a barrel on speculation that the spreading financial crisis will exacerbate a global economic slowdown and cut demand for crude oil.

Oil prices have fallen in the past month with concerns about waning global energy consumption.

Light, sweet crude for November delivery was up $193 to $89.74 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract fell overnight $6.07 to settle at $87.81, the lowest level since Feb. 6.

Prices have fallen about 40 percent since reaching a record at $147.27 on July 11.

The drop came as world stock markets plunged amid growing investor anxiety that the U.S. bad debt crisis is enveloping Europe. Germany announced Sunday a bailout package totaling €50 billion ($69 billion) for Hypo Real Estate, the country's second-biggest commercial property lender, part of a scramble by European governments to save failing banks.

What happened over the weekend was further evidence of the spread of this financial crisis to Europe, this deepens the sentiment that we're going to see a more widespread economic slowdown or even recession, and that's no good for oil demand but its great for consumers as prices will keep falling...Oil demand in the world's richest countries had already begun to slow since May,since OPEC, governments and oil companies started speculating and using crude as a weapon causing a slow but sure recession across the globe as most industrialized countries are now facing serious money shortage

The US rescue plan should keep a complete financial meltdown from occuring, but the demand data is not encouraging. In the developed countries it's falling, and that's why we're seeing downward pressure on prices.

In other signs the meltdown is spreading, Belgian Prime Minister Yves Leterme said Sunday that France's BNP Paribas had committed to taking a 75-percent stake in troubled European bank Fortis NV. British treasury chief Alistair Darling said he was ready to take "pretty big steps that we wouldn't take in ordinary times" to help the country weather the credit crunch.

Its unsuitabler for both producers and consumers if oil does not dip below $80 a barrel.Iranian Oil Minister Gholam Hossien Nozari said Saturday

"OPEC has signaled it may defend $80,"