By Bernie Woodall

U.S. crude fell 93 cents to $63.22 a barrel, the lowest settlement price since May 29, 2007. London Brent crude settled down 64 cents to $61.41 a barrel.

Oil prices have dropped by nearly 60 percent from a record high $147.27 a barrel in July as global economic turmoil dents world fuel consumption.

Demand has fallen in the United States, the world's top energy consumer, and in other industrial countries as the credit crisis infects the wider economy and begins to spread to emerging markets.

In China, apparent oil demand rose by just over 2 percent in September, the slowest growth in 10 months. [nPEK2698]

More U.S. banks lined up for government cash on Monday and the Group of Seven expressed concern the soaring Japanese yen posed a threat to financial and economic stability as recession worries spread worldwide. [nLR268373]

U.S. stocks slid on Monday amid growing concerns about the severity of a global economic slowdown and the bleak outlook for corporate profits. [nN27342079]

"It's unbelievable how closely we've been tracking equities," said Andy Lebow, vice president at MF Global in New York. "They're the dominating factor in the market right now when everyone is trying to digest everything that has gone on."

OPEC CUTS

Oil's losses came despite an agreement by the Organization of the Petroleum Exporting Countries made on Friday to cut 1.5 million barrels per day of output.

"While we still have questions about the demand side of the market, we should also appreciate that OPEC took significant measures to balance the market," said Tim Evans of Citigroup Futures Perspective.

Asian oil refiners said they had yet to receive notice of any curbs on their Gulf crude oil shipments, but most were expecting a 5 percent cut.

Iran's OPEC Governor Mohammad Ali Khatibi has said the group would reduce production further if the cut agreed in Vienna on Friday did not stabilize the market. [nBLA720214]

Traders were also eyeing moves by governments to combat the global financial crisis. South Korea cut interest rates, Australia intervened in the currency market and the U.S. Federal Reserve set the interest rates for companies buying commercial paper.

The volume of open contracts in energy, metals, grains and soft commodities on major U.S. commodity futures markets fell to its lowest since May 2006 in the week to October 21, as the risk of recession prompted some investors to pull out. [nSP171419]

(Additional reporting by Jane Merriman, Barbara Lewis and David Sheppard in London and Fayen Wong in Perth)