Oil prices fell to near a 20-month low of $60 a barrel Tuesday as hopes waned that a huge Chinese spending plan will do much to avert a prolonged slowdown in the global economy.

Light, sweet crude for December delivery was down $1.95 to $60.46 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Earlier in the session, it fell as low as $59.32 before rebounding.

The contract overnight rose $1.37 to settle at $62.41.

In London, December Brent crude fell $1.84 to $57.21 a barrel on the ICE Futures exchange.

Oil closed at $60.77 on Nov. 6, the lowest closing price since March 2007, and has fallen about 59 percent since reaching a record $147.27 in mid-July.

Analyst Olivier Jakob of Petromatrix in Switzerland noted the high volatility accompanying falling prices.

While the Nymex contract is now trading near first-half 2007 prices, the difference then between daily highs and lows was around $1.50 a barrel, while now the average daily range is around $5.50 a barrel with recent daily peaks at $9.50, Jakob said.

Oil prices and stock markets jumped Monday after China said it planned to spend $586 billion in a bid to spur economic growth. But pessimism soon returned as investors focused again on a swooning U.S. economy, which faces its worst recession in decades.

Most Asian and European stock markets fell Tuesday, following the lead of the Dow Jones industrials average, which dropped 0.8 percent Monday and was down another 1.9 percent Tuesday. Japan’s benchmark Nikkei 225 index slid 3 percent Tuesday, Hong Kong’s Hang Seng index dropped 2.9 percent, while London’s FTSE and Germany’s DAX indexes were both down around 2.5 percent.

“The market is realizing that (Chinese) package can’t prevent us from sliding into the mess we’re heading toward,” said Toby Hassall, an analyst with Commodity Warrants Australia in Sydney. “The economic outlook is pretty bleak.”

Investors are grappling with how bad the recession in the U.S. could be, as government statistics and company results reflect an abrupt slowdown in consumer demand, bank lending and investment during the second half of the year.

Crude demand from the U.S., the world’s largest consumer of energy, is a key driver of oil prices.

“We saw extremely poor car sales and pretty shocking unemployment numbers from the U.S. last week,” Hassall said. “It wouldn’t surprise me if oil edged down toward $50.”

U.S. car sales fell to a 25-year low in October while the unemployment rate shot to a 14-year high of 6.5 percent last month.

Oil prices fell despite signs that OPEC members are going ahead with production cuts agreed to at an emergency meeting in Vienna, Austria, last month.

Saudi Arabia told refiners in Asia on Monday that it would reduce supplies in December by around 5 percent, said Sucden Research in London.

Many analysts are expecting another cut by the Organization of Petroleum Exporting Countries, which will hold an extraordinary meeting on Dec. 17 in Oran, Algeria.

The prime minister of Qatar said Tuesday that “fair” oil prices of between $70 to $90 per barrel would ensure that expensive oil exploration could continue, avoiding price spikes in the future.

Sheikh Hamad Bin Jassim Bin Jabr Al-Thani said that while oil prices below $70 a barrel would help consumers in the short term, it later could trigger price rallies.

Lower prices mean weaker investment and lower output from oil producers, which risks boosting oil prices once global economic growth picks up again.

Militants in Nigeria on Monday resumed attacks on the country’s oil installations. The military said it killed eight people while guarding a facility in the oil-rich south of the country.

The Movement for the Emancipation of the Niger Delta, the region’s main militant umbrella group, said it wasn’t involved in any fighting. The military didn’t say which militant faction the dead fighters represented.

Militants frequently attack oil facilities, seeking to hobble Africa’s biggest petroleum industry and force Nigeria’s federal government to send more oil funds to the southern states where the crude is pumped.

“The focus of the market has really been on the demand side,” Hassall said. “I’d be surprised if supply side issues in Nigeria could change the mood of the market.”

In other Nymex trading, heating oil futures fell 3.66 cents to $1.969 a gallon, while gasoline prices dropped 4.10 cents to $1.3269 a gallon. Natural gas for December delivery slid 10.3 cents to $7.145 per 1,000 cubic feet.