Oil falls $4 as OPEC cut fails to halt slide

By Timothy Gardner

NEW YORK (Reuters) - Oil dropped nearly $4 a barrel on Friday as concerns about a global recession and slowing fuel demand took the steam out of an OPEC agreement to cut output.

The Organisation of the Petroleum Exporting Countries agreed at an emergency meeting in Vienna to take 1.5 million barrels a day of crude, about 5 percent of its supply, off the world market. Saudia Arabia's Oil Minister Ali al-Naimi said the reduction would take effect from November1.

U.S. light crude for December delivery settled $3.69 weaker at $64.15 a barrel, after falling as low as $62.65, its lowest since May 2007.

It has fallen more than $40 a barrel in a month.

London Brent crude settled down $3.87 at $62.05.

Traders said OPEC's action might not be enough to arrest oil's slide of more than 56 percent from a record $147 a barrel in July. Drops in motor fuel demand amid the economic downturn have been dramatic.

"Already we've seen demand destruction of 2 million barrels per day. I'm not convinced this cut will be enough to stop the slide," said Rob Laughlin, at broker MF Global.

Signs of a sharp slowdown in Europe and a barrage of profit warnings and job cut announcements from companies around the world intensified fears of deep global recession.