Oil has fallen to a new 17-month low, below $62 a barrel, amid pessimism about the global economy and its possible impact on fuel demand.

Prices have more than halved since they hit a record high of $147 a barrel in July as US demand falls and the credit crisis begins to spread to emerging markets.

US light crude for December delivery was down $1.77 at $62.38 after hitting $61.30 a barrel. London Brent crude was down $1.75 to $60.30.

Despite Opec's deal last Friday to cut output by 1.5 million barrels-per-day, there is continued gloom about a global recession.

Commodities strategist David Moore, at the Commonwealth Bank of Australia, said: "I think Opec has actually taken a fairly decisive step to cut production but the oil market is obviously just focusing on economic woes at the moment."

Signs of a sharp slowdown in Europe and a barrage of profit warnings and job cuts from companies worldwide have intensified fears of deep global recession.

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