Mumbai: Crude oil prices slumped for a third straight day on Thursday, hitting a 13-month low near $71, amid fears of a plunge in demand as economies teetered on the brink of recession.

Light sweet crude for November delivery on the New York Mercantile Exchange hit a low of $71.21 before closing at $72.48 a barrel, still down $2.06 a barrel from the previous day's close.

The contract was down $2.33 (or 3.1 per cent) at $72.21 a barrel in early morning trade. The contract has lost nearly a third in value in three weeks, the steepest decline since it began trading in 1983.

North Sea Brent crude slid below $68 a barrel, to the lowest level for more than 15 months, as energy demand took a toll.

European stocks also fell after Wall Street and Japan's Nikkei reported their worst one-day losses since the stock market crash of 1987.

Crude prices have fallen by more than 50 per cent from its July peak above $147 a barrel.

The Organisation of Petroleum Exporting Countries (OPEC) also lowered its forecasts for crude demand next year. The producer group has also convened an emergency meeting in November, in Vienna, amidst calls by member nations to cut production.

Also the United States, the world's biggest oil consumer, showed a rise in its oil inventories even as consumption showed signs of declining.

US crude oil stocks rose for the third straight week, gaining 1.9 million barrels, while distillate and gasoline stocks also increased following weak demand.

The falling oil price, however, came as good news for the consumers in the UK, who yesterday saw petrol prices drop below £1 a litre for the first time since December.