Brent oil price sinks below $60 in Asian trade

New York's main contract, light sweet crude for December delivery, slumped $2.73 to $61.42 a barrel.Â

The plunge in oil prices mirrored that of stock markets globally as investors remain unconvinced government efforts to shore up the ailing financial system are enough to stop the world from sinking into a recession.

The announcement Friday by the Organization of the Petroleum Exporting Countries (OPEC) that its output would be cut by 1.5 million barrels per day to 27.3 million barrels starting November was also seen as possibly dealing a blow to the weak global economy.

"OPEC is obviously aware of the problems facing the global economy," said David Moore, a Sydney-based commodity strategist with the Commonwealth Bank of Australia.

"They were responding to weaker oil consumption... It was quite a decisive move by OPEC on Friday," he said.

OPEC's number two producer, Iran, said Sunday the cartel was likely to cut back further on production if the latest reduction did not stabilize prices.

"Be assured that if (Friday's) decision is not effective on the market, OPEC will take steps to consolidate the market and stabilize prices at its next meeting," Iran's representative Mohammad Ali Khatibi said in an interview on state television.

OPEC said its decision Friday to slash output would be reviewed at the cartel's next meeting in Oran, Algeria, on Dec. 17.

Many analysts have questioned the effectiveness of measures taken by OPEC, given the seriousness of the global financial crisis that has sharply reduced the prospects for economic growth and thus oil consumption.

Humphrey Harrison, managing director of energy consultants Horizon Strategies, said the market could expect more OPEC meetings on output policy over the next few months.

"Were in wholly unchartered territory right now" regarding the financial crisis, Harrison told AFP. "We're probably going to see many OPEC meetings for a while," added the oil analyst.

OPEC said in its statement Friday published alongside its output decision that "the financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy, in general, and oil in particular."

"Moreover, forecasts indicate that the fall in demand will deepen, despite the approach of winter in the northern hemisphere," the cartel said.

OPEC produces about 40 percent of the world’s crude.