Oil drops 6 pct on recession concerns

NEW YORK (Reuters) - Oil prices tumbled 6 percent on Thursday on expectations that demand would slow further after the International Monetary Fund predicted developed economies would deliver their worst performance since World War II.

U.S. crude traded down $3.95 to $61.35 a barrel by 1:53 p.m. EST (6:53 p.m. British time), after hitting a 19-month low of $60.16 earlier and extending Wednesday's 7 percent drop.

London Brent Crude dropped $3.94 to $57.93 a barrel.

The IMF said it now expects 2009 global economic growth of 2.2 percent, down 0.8 percentage point from its October forecast. It also lowered its 2009 baseline oil price projection to $68 a barrel from $100.

Oil prices have dropped from record highs above $147 a barrel in July as the growing global economic crisis damps demand in developed economies.

U.S. government data released on Wednesday showed an unexpected rise in gasoline stocks last week, following a 2.3 percent fall in demand in the world's biggest energy consumer.

"Oil prices slipped back further into a recently established trading range yesterday and overnight, as the focus of participants was on the threats to demand posed by a contracting global economy," John Kilduff, senior vice president at MF Global, wrote in a research note.

Slowing demand and the sharp price drop prompted the Organisation of Petroleum Exporting Countries to agree to cut output by 1.5 million barrels per day at an emergency meeting last month.

While market sources and members of the producer group say the reductions are already being made, Venezuelan Oil Minister Rafael Ramirez said on Thursday OPEC needed to reduce output by a further 1 million barrels per day.