Energy prices also dropped as the dollar rose to the highest in more than 2 1/2 years against the euro, dimming the appeal of commodities as a hedge. OPEC may make an additional output cut if its Oct. 24 decision to lower production fails to bolster prices, said Mohammad Ali Khatibi, Iran's representative to the group, according to the country's state-run Mehr news agency.
Crude oil for December delivery fell $1.20, or 1.9 percent, to $62.95 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $61.30, the lowest since May 9, 2007. Prices, which have tumbled 57 percent since reaching a record $147.27 on July 11, are down 31 percent from a year ago.
Investors looking for protection against the dollar's decline earlier this year helped lead crude oil, gold, corn and gasoline to records. The euro fell as much as 2.3 percent to $1.2334, the weakest since April 2006, from $1.2623.
Oil is heading for a 37 percent drop this month, the steepest since at least 1988 in New York, as the Organization of Petroleum Exporting Countries cut oil production for the first time in almost two years. The 13 OPEC nations agreed to reduce supply by 1.5 million barrels a day starting in November.
The OPEC price basket, an average of 11 crude-oil grades sold by the group, dropped to $57.57 a barrel on Oct. 24, the lowest since March 21, 2007.
Global oil demand may fall for the first time in 15 years in 2008 and stagnate next year, the Centre for Global Energy Studies said Oct. 20. OPEC, the International Energy Agency and the U.S. Energy Department all cut their forecasts for growth earlier this month.
The Energy Department will probably report Oct. 29 that U.S. supplies of crude oil, gasoline and distillate fuel, a category that includes heating oil and diesel, rose last week, a Bloomberg News survey showed.
Brent crude oil for December settlement declined $1, or 1.6 percent, to $61.05 a barrel on London's ICE Futures Europe exchange. Futures touched $59.02, the lowest since Feb. 22, 2007.