NEW YORK (Reuters) - Oil prices dropped another 5 percent to a seven-month low on Tuesday, extending the steepest two-day slide since 2004 as mounting economic turmoil sent investors fleeing to safer havens.

The losses came despite U.S. supply disruptions after Hurricane Ike crashed through the Gulf of Mexico last week and left a quarter of the nation’s energy output idled.

“People are getting out of commodities and getting into safer havens, like bonds,” said Andy Lebow, broker at MF Global in New York.

U.S. crude for October settled down $4.56 at $91.15 a barrel, adding to losses of more than $5 on Monday. Prices have dropped about 10 percent in two days, the biggest slide since December 2, 2004.

Brent crude fell $5.02 to $89.22 a barrel.

“If the economic turmoil continues, demand will continue to drop,” said Jonathan Kornafel, Asia Director at U.S.-based options trader Hudson Capital Energy. “It’s a bit of panic in the markets.”

Monday marked the worst day on Wall Street since markets reopened after the September 11 attacks in 2001, with investors fleeing to safer havens, such as gold and bonds, after news of Lehman Brothers' LEH.N bankruptcy and the sale of Merrill Lynch MER.N.

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Growing problems at insurer American International Group AIG.N added to fears about the financial sector's stability and the outlook for the global economy.

“If AIG tanks, that will be the big one. AIG has more to do with the oil price right now than the Saudis do,” said Larry Grace, an analyst at Kim Eng Securities in Hong Kong.

Slowing demand due to economic weakness in the United States and other top consumer nations has sent crude prices tumbling from record highs over $147 a barrel in July.

European shares fell on Tuesday amid concerns over AIG, driving up the yen and government bonds. But a report that the Federal Reserve was mulling a loan package for AIG trimmed losses late in the day.

Federal Reserve policy-makers stopped short of lowering U.S. interest rates at a meeting on Tuesday, opting for the time being to soothe rattled financial markets with central bank lending facilities rather than rate cuts.

The slide in oil prices came despite reports that Hurricane Ike toppled several oil and natural gas production platforms in the Gulf of Mexico, signaling that a full recovery of output from the region could be slow.

Threats from hurricanes since late August have already cut more than 20 million barrels of oil supply from the Gulf and idled a quarter of U.S. refinery capacity -- digging into supplies and sending gasoline prices up at the pumps.

U.S. gasoline stockpiles are already running at their lowest level since November 2000, and could drop to their lowest on record due to the effects of Ike, according to a Reuters poll of analysts.