LONDON: Oil fell below $44 a barrel on Friday, after the collapse of a $14 billion rescue plan for US automakers caused heavy losses across global financial markets and Goldman Sachs predicted oil could drop to $30 a barrel.
US crude oil for January delivery was down $3.97 at $44.01 a barrel by 1455 GMT.
The losses wiped out gains made on Thursday, when prices rallied more than $4 to a session high of $49.12 a barrel before dropping back in late trading.
Oil sank to $40.50 last Friday, its lowest in 4 years.
London Brent crude was down $3.51 at $43.88.
US shares slid at the open, pressured by the uncertainty over the survival of the country s automakers.
The plight of the big US auto firms, including General Motors Corp and Chrysler, illustrates the severity of the global economic downturn that has hit demand for oil.
The collapse in world oil demand in the fourth quarter of 2008 as the global credit crunch intensified, now threatens to push oil prices below $40 a barrel in the near term, Goldman Sachs said in a research note.
The impact of the global economic recession has swung the oil market from pricing demand destruction in 2008 to pricing supply destruction in 2009. -Additional reporting by Jennifer Tan in Singapore and Osamu Tsukimori in Tokyo; Editing by Peter Blackburn and James Jukwey