LONDON, England (Reuters) -- Oil dropped under $60 to a six-month low on Monday as abundant supplies in top consumer the United States and fears that slower U.S. economic growth would stunt demand for fuel extended a price retreat.
U.S. crude has fallen nearly $19 from its mid-July peak of $78.40, its biggest slide in more than 15 years.
The 24 percent decline was set off as investors' concern faded over Iran and the Atlantic hurricane season proved unexpectedly mild.
The rout deepened last week as speculators fretted over slowing economic growth in the world's top consumer and hedge fund Amaranth Advisors registered billions of dollars in losses.
U.S. crude was trading down 75 cents at $59.80. London Brent was 93 cents lower at $59.48.
"You have summer support unwinding, very bad product market support and on top of that the U.S. economic slowdown is becoming more compelling," said Eoin O'Callaghan of BNP Paribas.
BP's move to restore output at its Alaskan oilfield earlier than expected added to a sense of healthy supply.
The UK major said on Friday it will add 150,000 barrels per day (bpd) of output to Prudhoe Bay in about a week, lifting total production to 400,000 bpd less than two months after it was forced to halve flows due to a corroded pipeline.
Prices have been under pressure as U.S. inventories of distillates climb to their highest in nearly eight years and natural gas stocks swell to record-high levels, assuring consumers of ample winter fuel supplies.
At the same time, investors have begun to fret over the pace of U.S. economic growth -- a worry heightened last week after a key business activity index turned negative for the first time since April 2003, indicating a decline in manufacturing.
Desirable price level
But Goldman Sachs cautioned that the market's weakness may be fleeting, as a severe winter could eat into comfortable stocks while delays to new oilfields and refineries may put renewed strain on global capacity by the end of this year.
Even those who say the market may struggle to rebound warn that further losses are likely to be checked soon by members of the Organization of the Petroleum Exporting Countries (OPEC), many of whom say $50-$60 is a desirable price level.
While OPEC is concerned by the sharp drop in prices, it has no plans to hold an emergency meeting.
"It's too early at the moment, but we are monitoring it," an OPEC source said when asked if OPEC needed to meet ahead of a scheduled meeting in December.
Saudi Oil Minister Ali al-Naimi said last week that prices were "reasonable," a shift from calling prices "high" that some analysts read as a signal for potential output action.
"OPEC has a very difficult decision to make because if they try and maintain a price support to high then they will exacerbate the downturn for the world next year that we are forecasting," said O'Callaghan.
