Oil Price touched 19-month low on Tuesday. It is trading below the psychologically important $60 level, as china has taken massive economic stimulus plan.

In New York exchange the price of Light, sweet crude for December delivery fell $3.08 to settle at $59.33 a barrel. This brings the price to its lowest level since March 21, 2007.

The price of oil has touched all time high in July when it was trading above $ 147. Since then it has fallen about 60% on fears that global economic weakness will continue to undermine demand for gasoline and other petroleum products.

The Chinese government plan of $ 586 billion to boost economic activities has briefly raised demand concerned but investors now appears less worried as the plan will take time to implement.

On Monday, oil raised $1.37 to settle at $62.41 a barrel.

Oil Industry analyst Tom Pawlicki said “yesterdays rebound was due to Chinese stimulus package. He added “the rally was too enthusiastic for the news.”

Pawlicki points out that the package will provide “only” $14.6 billion in the current quarter, with the remaining amount disbursed over the next two years. He added that the plan’s spending on housing and infrastructure may not provide the desired economic effect.

“The problem is that there is already a housing glut in China, and the infrastructure will likely rebuild the earthquake devastated area in Sichuan rather than create much new expansion,” Pawlicki said.