SINGAPORE — Oil prices fell to an eight-month low below $90 a barrel on speculation that the spreading financial crisis will exacerbate a global economic slowdown and cut demand for crude oil.

Light, sweet crude for November delivery was down $4.69 to $89.19 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.

Oil prices have tumbled nearly 40 percent since peaking in July. The Nymex front-month contract last traded this low in early February.

The drop came as world stock markets plunged amid growing investor anxiety that the U.S. bad debt crisis is enveloping Europe. Germany announced Sunday a bailout package totaling 50 billion euros ($69 billion) for Hypo Real Estate, the country's second-biggest commercial property lender, part of a scramble by European governments to save failing banks.

"What happened over the weekend was further evidence of the spread of this financial crisis to Europe," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. "This deepens the sentiment that we're going to see a more widespread economic slowdown or even recession, and that's no good for oil demand."

Investors shrugged off Friday's approval by the U.S. House of Representatives of a $700 billion bailout plan to buy bad mortgage debt.

Oil demand in the world's richest countries had already begun to slow since May, before the worst of the financial turmoil hit the United States last month, Shum said.

"The rescue plan should keep a complete financial meltdown from occurring," Shum said. "But the demand data is not encouraging. In the developed countries it's falling, and that's why we're seeing downward pressure on prices."

Investors will be watching if the Organization of Petroleum Exporting Countries moves to cut output should prices fall further.