SINGAPORE, Oct 6, 2008 (AFP) - The benchmark New York oil futures contract fell below 90 dollars a barrel Monday in Asia after Wall Street's financial meltdown extended to Europe, triggering fears of a global slowdown that could further damage oil demand, dealers said.

In late afternoon trade, New York's main contract, light sweet crude for November delivery, hit a low of 89.07 dollars before rebounding to 90.32, still down 3.56 dollars.

London's Brent North Sea crude for delivery in November had already dropped below the 90-dollar mark, on September 16.

The Brent contract traded 3.46 dollars lower at 86.79 dollars a barrel on Monday.

World oil prices first fell through the 100-dollar level at the start of the year and touched record highs above 147 dollars in July. But they have fallen sharply since then on concerns that demand is slowing as a result of the global financial crisis, dealers say.

'I think it's just sort of continuing the steepening gloom you are seeing,' said Jason Feer, vice president of energy market analysts Argus Media in Singapore.

He said that in the absence of weather or political factors to influence oil prices, investors 'are concerned about the economic issues.'

On Sunday, BNP Paribas announced it would take control of ailing finance group Fortis' operations in Belgium and Luxembourg.

Germany sealed a public-private rescue plan for the country's fourth biggest bank Hypo Real Estate as the government extended a blanket guarantee for all personal bank deposits to avert panic withdrawals.

The announcements came on the eve of a meeting of European finance ministers in Luxembourg beginning Monday. They will seek to flesh out broad plans for restoring confidence in the crisis-struck banking system, agreed to over the weekend by Europe's biggest economic powers.

'The risks of a severe international economic slowdown, possibly extending to a recession in some developed economies, have increased as a result of the recent strains in the international financial system,' said David Moore, a commodity strategist with the Commonwealth Bank of Australia in Sydney.

'If there is a severe downturn in the international economy, oil prices could prove weaker than forecast,' he said.

CFC Seymour securities said from Hong Kong on Monday that recent data from the US and elsewhere 'highlight the fact that the financial crisis is turning into an economic one, and the process is so advanced that the bailout will not reverse it.'

The comment referred to a bailout package that will see the US government buy up to 700 billion dollars worth of tainted mortgage-related assets at the root of the global crisis.

Iranian Oil Minister Gholam Hossein Nozari said on Saturday that a price below 100 dollars for a barrel of crude oil was 'unsuitable.'

'An oil price of less than 100 dollars is unsuitable for anyone, either for producers or for consumers,' Nozari told reporters on the sidelines of a gas export conference. He did not elaborate.