LONDON, Sept 16: Oil prices fell on Tuesday, slipping under $89 on the belief that weak economic growth will result in lower energy demand, traders said.

Opec on Tuesday cut its world oil demand growth forecast for 2008 to 1.02 per cent from 1.17 per cent previously, in the face of falling demand already occurring in the United States, the world’s biggest energy consumer.

The price of crude oil has now plunged by about 40 per cent since striking record highs above $147 in July.

London’s Brent North Sea crude for delivery in November tumbled to a seven-month low of $88.99 per barrel. The contract later stood at $90.79, down $3.45.

New York’s main contract, light sweet crude for October, lost $4.34 to $91.37.

Deepening worries about a slowdown in demand “are likely to haunt energy markets in the near term, while another collapse of a major financial institution, or even (ailing US insurer) AIG, could cause an even broader sell-off in commodities,” Sucden analyst Andrey Kryuchenkov said in London.

Oil prices tumbled by more than $5 on Monday amid global market jitters after Wall Street investment bank Lehman Brothers collapsed and financial developments stoked concerns about the health of the US economy.

Amid falling demand for energy meanwhile, the Organisation of Petroleum Exporting Countries -- producer of 40 per cent of the world’s oil -- last week cut its output in a move aimed at preventing a further drop in prices.

Oil market traders kept a watchful eye on unrest in Nigeria, which is the second biggest crude producer in Africa after Angola.

Southern Nigerian militants said on Monday they had attacked a second Niger Delta oil installation in 24 hours after declaring an all-out “oil war” as part of a campaign for greater autonomy for the region.

Security has worsened markedly in oil-rich southern Nigeria since Movement for the Emancipation of the Niger Delta (MEND) emerged in early 2006, multiplying attacks, kidnappings of foreign oil workers and sabotage of both land and offshore facilities.—AFP