SINGAPORE -- World oil prices fell back under $90 on Wednesday as traders fretted over the global financial crisis and the resultant fall in energy demand, dealers said.

New York's main contract, light sweet crude for delivery in November, was down 40 cents at $89.66 a barrel after climbing $2.25 to $90.06 at the close of trading on the New York Mercantile Exchange on Tuesday.

Brent North Sea crude for November eased 26 cents to $84.40 after rising 98 cents to $84.66 Tuesday in London.

"It's all doom and gloom on the demand side," said Tony Nunan, a manager with Mitsubishi Corp's international petroleum business in Tokyo. "The economy looks like it's going to get worse before it gets better."

Asian shares headed lower again on Wednesday after the Dow closed at a five-year low overnight. A vicious downward spiral was reinforced by fears of a deeper credit crunch leading to severe recession.

Japanese shares plunged 4.54 percent in Wednesday morning trade and Hong Kong opened down 5.1 percent.

Oil prices have dropped from record highs above $147 in early July, and hit eight-month lows below on Monday.

But prices picked up on Tuesday after Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), called on crude producers to cut output to protect their incomes.

"We are very much worried about this drop of the price," said Libyan Energy Minister Shukri Ghanem.

In September, OPEC decided to cut its production by 520,000 barrels of oil per day.

Phil Flynn at Alaron Trading downplayed the impact of any reduction in OPEC output.

"Even if they cut production, the market might not care" beyond a few days of rallying because demand would not be sustainable, Flynn said.

"Economies in turmoil will not pay artificially high prices for oil for very long and consumption would fall," he said.

A US Department of Energy (DoE) monthly report Tuesday said New York crude oil prices were expected to average $112 a barrel in 2008 and 2009.

The prior 2009 estimate was $126 a barrel.

Later Wednesday, the DoE was to release its regular weekly report on oil inventories in the United States, the world's biggest energy consumer.