NEW YORK—Oil tumbled on Monday as the growing U.S. subprime mortgage crisis heightened concern over the economic health of the world's top energy consumer.
Stock markets fell as Citigroup U.S. crude fell $1.23 cents to trade at $94.70 a barrel by 1859 GMT after falling as low as $93.72 earlier. London Brent crude gave up 90 cents to $91.18.
Oil has climbed about 40 percent since the summer and reached a record high above $96 a barrel last week, boosted by the weak dollar, concerns over tight supplies ahead of winter and speculative inflows into oil and other commodities.
But the U.S. sub-prime mortgage crisis has hurt oil demand in the giant market and stoked worries of a wider economic crunch.
"The myriad of banks confessing to write-downs, no doubt, is contributing to an air of anxiety in the financial markets, while increasing the odds of a possible U.S.-led recession being triggered," said Edward Meir of MF Global.
Tensions in the Middle East have helped drive up oil, including a recent flare-up between Turkey and Kurdish rebels in northern Iraq. Analysts said a slight softening in tone was helping to pressure prices.
Iraq said on Saturday it was ready to arrest Kurdish guerrilla leaders responsible for cross-border raids into Turkey to avert a major incursion by the Turkish military.
Iran, the world's fourth-biggest oil exporter, said on Sunday it welcomed proposals to work with other countries on uranium enrichment, but will not accept an offer that requires it to halt sensitive atomic work.
Speculators on the New York Mercantile Exchange crude oil market increased their net long positions in the week to Oct. 30, data from the U.S. Commodity Futures Trading Commission showed.
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