LONDON, Feb 6: Oil prices plunged below 40 dollars a barrel in New York on Friday, as grim unemployment data stoked concerns about weak energy demand in key consumer the United States, traders said.

New York’s main futures contract, light sweet crude for delivery in March, fell as low as 38.60 dollars per barrel. It later stood at 39.54, down 1.63 dollars from the close on Thursday.

Brent North Sea crude for March dropped 1.23 dollars to 45.23 dollars a barrel in London.

The US unemployment rate surged in January to 7.6 per cent, the highest since 1992, as 598,000 jobs were cut, the Labour Department reported on Friday.

The oil market has been hit this week by mounting concern that the US -- the world’s biggest energy consuming nation -- will slash its energy demand to cope with a dramatic downturn, according to analysts.

The Organization of the Petroleum Exporting Countries (OPEC) last week signalled it would consider more reductions in output as its members try to lift prices and, in turn, their incomes.—AFP