Oil dipped as low as $88.89 a barrel after European leaders pledged to bail out troubled banks and protect depositors. OPEC President Chakib Khelil said today the price slide will continue next year, and Saudi Aramco, the world's largest state oil company, cut its selling prices for exports to Asia and the U.S.
Crude oil for November delivery fell $3.65, or 3.9 percent, to $90.23 a barrel as of 10:16 a.m. on the New York Mercantile Exchange. Earlier, it touched the lowest since Feb. 8. Futures have fallen 38 percent from the record $147.27 reached July 11.
New York oil prices declined 12 percent last week as reports showed U.S. fuel demand the previous four weeks was the lowest in almost seven years and manufacturing shrank in September at the fastest pace since the last recession in 2001. The Labor Department reported a bigger-than-expected 159,000 drop in payrolls in September last week.
The dollar rose to the highest since August 2007 against a basket of currencies, reducing the investment appeal of dollar- denominated commodities. The euro fell as low as $1.353, from $1.3772 Oct. 3, after Germany said it will guarantee personal bank deposits, in a bid to stabilize the nation's banking system.
Brent crude oil for November settlement fell $3.61, or 4 percent, to $86.64 a barrel on London's ICE Futures Europe exchange. Earlier, it touched $85.50 a barrel.
Gasoline for November delivery fell 8.4 cents, or 3.8 percent, to $2.1443 a gallon. Earlier, it touched $2.1228 a gallon, the lowest since Oct. 24, 2007. Gasoline is down 41 percent from a record $3.631 on July 11.
Regular gasoline at the pump, averaged nationwide, dropped 2 cents to $3.504 a gallon, according to AAA, the nation's largest motorist organization. The price has fallen 15 percent from a July record.
Heating oil for November delivery fell 11.8 cents, or 4.4 percent, to $2.544 a gallon in New York. Futures touched $2.5312, the lowest since Feb. 8.