'Panic and fear'
Mark Pervan, a senior commodity strategist with the ANZ Bank in Melbourne, said: "The whole market has lost confidence in everything.
"Everyone is worried about global growth, and oil is the front line commodity for that. There's just a lot of panic and fear in the market."
"The whole market has lost confidence in everything"
Mark Pervan, ANZ Bank strategist
The sharp falls came despite news that Opec ministers (the Organisation for the Petroleum Exporting Countries) will hold an emergency meeting next month on the impact of the markets crisis - amid speculation that the crude producers' cartel could cut its supplies to artifically keep oil prices higher.
Gordon Brown, the British prime minister, said that a cut in output would be "wrong for the world economy".
"I'm concerned when I hear that the Opec countries are meeting, or about to meet, to discuss cutting production, in other words making the price potentially higher than it should be.
"It would be wrong for the world economy ... for Opec to cut production and therefore keep prices high," he said.
Opec decided to cut its production of 520,000 barrels of oil per day at its last meeting in September, to sustain oil prices above $100 a barrel.
Crude prices have since plunged dramatically sending officials from Opec into crisis mode.
"The deteriorating outlook for world growth is leading to a violent correction in commodity prices," Martin Lewis, a Deutsche Bank analyst said.
"Further deterioration in the global GDP [gross domestic product] outlook could act as a trigger for lower oil prices," he said, adding that prices could fall to about $60 a barrel.
|Experts believe pump prices will fall in coming months as demand for fuel wanes [EPA]
The price of crude oil has now plunged by almost 50 per cent since striking record high levels above $147 per barrel on July 11.
Meanwhile, global stock markets suffered another calamitous sell-off on Friday, as the ongoing financial crisis showed no signs of easing up, dealers said.
"Crude prices continued to tumble as fear over the uncertain outlook for energy demand continues to be the dominating factor," Nimit Khamar, an analyst for Sucden Research, said.
"Markets are very much trading on fear, which has overwhelmed [the] fundamentals of supply and demand," he said.
Experts believe that petrol pump prices will fall in coming months as demand for fuel wanes in the face of recession fears and cutbacks on spending.