NEW YORK (Reuters) - Oil dropped more than 7 percent, on Wednesday, touching a new 16-month low as rising U.S. fuel inventories added to signs a global economic slowdown has dragged down demand.

Stocks, currencies, oil and commodities tumbled on Wednesday and governments from Budapest to Buenos Aires resorted to emergency action to rescue their economies from the worst financial crisis in 80 years.

U.S. crude settled down $5.43 at $66.75 a barrel, after earlier touching $66.20, its lowest since June 14, 2007.

London Brent crude settled $5.20 lower at $64.52 a barrel.

Oil has plunged more than 50 percent from its record high above $147 in July as the financial crisis cuts energy demand in top energy consumer the United States and other industrial countries.

Data from the U.S. Energy Information Administration showed U.S. product demand fell 8.5 percent over the four weeks ending October 17 compared with year-ago levels, while inventory levels continued to swell.

U.S. crude oil inventories rose 3.2 million barrels in the week to October 17, above analyst expectations for a 2.6 million build. Distillate inventories leaped by 2.2 million barrels while gasoline inventories rose by 2.7 million barrels.

“The numbers look bearish on virtually all fronts,” said Jim Ritterbusch of Ritterbusch & Associates. “The data reinforces our bearish view and ups the probability of $62 crude,” he said.

The U.S. dollar hit a two-year high against a basket of currencies on Wednesday, pressuring commodities across the board. The Reuters-Jefferies CRB index, a global commodities benchmark, approached 4-1/4-year lows on growing recession fears.

OPEC PRESSURE

Gloom about the global economic outlook could limit the impact of any oil supply cuts OPEC might agree at an emergency meeting on Friday, and the group’s president said output policy would prove a difficult balancing act.

The cartel is under pressure to reduce output at the Vienna meeting, with many OPEC ministers calling for a supply cut to help balance the oil market.

OPEC President Chakib Khelil said oil stocks are high and some member countries are finding it hard to sell their oil.

“There is excess of crude not able to be absorbed by the market,” Khelil told reporters. “If (Friday’s) decision goes too far, it will affect countries who are already affected by economic crisis.”

“If it doesn’t go too far, then it will affect the producers who might end up in the category of people affected by the financial crisis,” he added.