Mumbai: Crude oil prices fell to a new 17-month low below $62 a barrel  as investors discounted effects of a 1.5 million tonne per day production cutback announced by oil producing countries, amidst growing evidence of a severe global economic slowdown and a consequent fall in crude demand.

Light sweet crude for December delivery on the New York Mercantile Exchange hit a 17-month low at $61.30 a barrel and was down $2.35 at $61.80 a barrel by afternoon. North Sea Brent crude was down $2.20 at $59.85.

The December contract was down 32 cents at $63.83 a barrel in electronic trading by midday in Singapore.

Traders said expectations about a further slowdown in the world economy overshadowed OPEC's deal to slash output by 1.5 million barrels per day. Some traders fear the reduction will not be enough to arrest the price slide.

Crude prices have fallen more than half since the July peak of $147 a barrel as demand fell in the US, the world's top energy consumer, and in other industrial countries as the effects of the financial market crisis trickled down to the wider global economy.

China's oil demand grew at the slowest pace at just around 2 per cent in September, the slowest growth in 10 months.

Commodity prices across the markets have also reported heavy losses as investors poured more and more money into oil and metals like gold and copper.

The Indian government had last week said it might cut administered prices of petro fuels if crude oil falls below $ 67 a barrel. It, however, said much will depend on the impact of an OPEC production cut on supplies and prices.

Now that fuel prices have stayed below $67 levels, the government has enough reason to go for a price cut.

Refineries in India are estimated to have processed 3.2 million barrels per day (bpd) of crude in September – an additional 2.8 per cent - as Indian Oil Corporation and Essar Oil ran at a higher rate but Reliance Industries' Jamnagar unit slowed down, official data showed. Refinery margins were at $4.62 a barrel.

Overall, refinery utilisation rose to 107 per cent of installed capacity in August, up from 104.3 per cent a year ago, data showed.