London bellwether Brent futures traded at $10.40 a barrel, down six cents after touching a new 12-year low of $10.08 on Monday. Average prices for the year to date, at $13.60 a barrel, are the lowest since 1976.

Traders said oil markets were handing down their verdict on Opec producers who at a meeting last week failed to take any fresh action to address one of the worst gluts on record.

"It was a just punishment," said a trader in London of Monday's slump.

Dealers now fear that the reopening of old Opec rivalries at a rancorous meeting in Vienna could signal a scrap for market share among the group's biggest producers, rather than another round of the supply cuts agreed earlier in the year.

Oil companies have reacted to the price crash with a series of deals which are expected to culminate on Tuesday with the biggest industrial merger everbetween US Exxon and Mobil.

"At a time when the oil industry is merging, Opec appears tobe demutualising," said Peter Gignoux at Salomon Smith Barney.

Opec does not meet again until March by which time it will have to have patched up some glaring differences if it wants to add to the 2.6 million barrels daily of output cuts it made this year and avoid a lengthy period of single-digit oil prices.

A basket of seven Opec crudes was valued at $9.89 a barrel on Monday, dipping into single digits for the first time since 1986.

Opec's best hope now, said analysts, is some careful behind-the-scenes discussion of strategy and a cold winter in the United States, the world's biggest importer.

Meanwhile, Northwest European oil products were sharply lower, taken down by cascading crude amd gas oil futures, traders said.

High sulphur barges fell on the tumbling crude numbers afteran early deal in Antwerp at $56 fob per tonne. Talk fell steadily through the day, with $54 paid in the afternoon and latediscussions in the region of $53 fob ARA.

In the cargo market, a British-based major was said to have bought a 20,000-25,000 tonne cargo of high sulphur bunker spec material from a Scandinavian refiner, for a price of high fob NWE +$1.50.

US-based trader was also heard looking for high sulphur material, but there was very little new end-user interest.

In the North, a pipeline between a fuel oil storage depot and a power station owned by a British consumer was said to be out of action for about a week and the company was heard switching to natural gas for the moment while the problem was fixed.

Low sulphur cracked fuel continued to languish, with a little buying interest in the South of the continent from a Spanish refiner heard looking to cover demand into Tenerife.

Gasoline barge prices lost considerable ground on the back of plummeting crude and gasoline futures, dealers said.

As crude futures dramatically posted fresh record lows on both the London and New York exchanges, gasoline barges tradedprogressively lower.

Rotterdam refinery barges traded at $116 fob a tonne followed by $115.50 fob and $113.50 fob a tonne for Amsterdam-Rotterdam lifting.

Nymex gasoline futures losses also piled the pressure on losing some 2.38 cents to trade at 32.60 cents a gallon.

Much of the play was sidelined as traders watched futuresspiralling lower.

Earlier in the session premium unleaded barges traded at $116.50 fob for Amsterdam-Rotterdam lifting and $117 fob for Rotterdam refinery, with both parcels moving from a German trader to a Wall Street bank.

Gas oil premiums were slightly firmer as outright prices slumped in line with new 12-year lows for IPE futures, trader said.

On the cargo market, a US oil company bought a dieselflexi cargo from a US energy company for December 1-10 loading at December +$9.25 basis Le Havre.

The buyer also said he had bought a similar cargo for December 21-31 loading from a French major on Friday for January +$6.

A Belgian refiner was said to be bidding January +$3 forsecond half December delivery into Lorient.

Barge premiums were slightly firmer as sellers tried to salvage something from plummeting IPE gas oil futures, traders said.

A Swiss trader bought 2,000 tonnes of heating oil for first half December delivery at December -50 cents while other deals were dome at December -$1 to -25 cents.

Diesel was offered out of Antwerp at December +$7 for December 1-10 delivery and at December +$7.25 for December 5-15 loading. Offers out of Rotterdam stood at December +$8.50.