Crude oil futures tumbled Friday on increasing signs of a global economic slowdown.

U.S. futures fell to their lowest close in eight months, while the European benchmark, Brent futures plunged below the psychologically significant $100 level for the first time since October--and suffered its lowest close in 17 months.

Bleak numbers on U.S. employment coupled with dismal manufacturing numbers from China to Europe eroded hopes for economic expansion around the world, which would stifle demand for crude, traders and analysts said.

The grim growth outlook comes as inventories are soaring and U.S. production of crude is on the rise, said Tim Evans, an analyst with Citi Futures Perspective.

"There's too much supply, not enough demand, and doubts about where demand is headed," he added.

Light, sweet crude futures for July delivery settled at $83.23 a barrel, down $3.30, or 3.8%, on the New York Mercantile Exchange. That's the lowest settlement since last Oct. 7. July Brent futures lost $3.44, or 3.4%, to $98.43--the largest one-day price and percentage loss of the year and the lowest settlement since Jan. 27, 2011.

Weak manufacturing data from Asia to Europe initially sent crude prices lower. Disappointing numbers from China, the world's second largest oil consumer, were particularly damaging. China's purchasing managers' index, an indication of industrial activity, fell sharply to 50.4 in May from April's 53.3. The widely watched HSBC version of China's PMI fell to 48.4 last month from the previous month's 49.3. As with all PMI numbers, any reading below 50 indicates contraction.

However, U.S. employment numbers well below expectations accelerated oil's slide.

May nonfarm payrolls indicated that a lackluster 69,000 jobs were created, well below the 155,000 predicted in a survey by Dow Jones Newswires. The nation's unemployment rate also rose to 8.2% from 8.1%.

Even in the price free-fall, U.S. crude rose from its intraday low of $82.29, in part due some traders' belief that the economic situation will prompt the U.S. Federal Reserve to provide stimulus to prevent further deterioration.

"The odds of stimulus are going up pretty dramatically," said Phil Flynn, an analyst with the Price Futures Group. In the past, government-backed stimulus has weakened the U.S. currency--and pushed up dollar-denominated assets like crude.

A report on U.S. manufacturing added to the disappointing outlook. The purchasing managers' index from the Institute of Supply Management indicated manufacturing slowed a bit last month, with the index falling to 53.5, further than the forecasted 53.9, from April's 54.8. However, any reading above 50 indicates expansion.

While markets across asset classes slumped broadly after the weak jobs report, oil futures saw some of the steepest declines. Oil and gasoline demand in the U.S. is closely linked with transportation demand. Any indications fewer commuters will be on the roads--either due to unemployment or curtailing discretionary trips--can weigh heavily on fuel prices.

Evans said that oil traders are likely to remain cautious in the foreseeable future, as the month of June is packed with events that could trigger strong market reactions--from Greek elections and Iranian nuclear talks to an OPEC meeting in mid-June.

Those who have liquidated their long positions en masse are unlikely to boldily jump back in while the uncertainty lingers, he said.

"That wave of liquidation may be coming to a climax here, but I don't see them flipping around and building positions again given the uncertainty we know is right in front of us," Evans added.

-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214; angel.gonzalez@dowjones.com

--Jerry DiColo contributed to this article.