Oil prices have tumbled 68 percent in New York since reaching an all-time high of $147.27 a barrel on July 11. Fuel demand dropped as the U.S., European and Japanese economies slowed. The U.S. first entered a recession in December 2007, the panel of economists that dates American business cycles said yesterday.
Crude oil for January delivery fell $2.32, or 4.7 percent, to $46.96 a barrel at 2:41 p.m. on the New York Mercantile Exchange, the lowest settlement since May 20, 2005.
Gasoline for January delivery declined 5.29 cents, or 4.8 percent, to settle at $1.0583 a gallon in New York.
Pump prices have followed futures lower. Regular gasoline, averaged nationwide, dropped 0.8 cent to $1.812 a gallon, AAA, the largest U.S. motorist organization, said on its Web site today. It’s the lowest price since January 2005. The fuel has tumbled 56 percent from the record $4.114 a gallon reached on July 17.
The Organization of Petroleum Exporting Countries, the International Energy Agency and U.S. Energy Department slashed demand projections in November because of the economic outlook. U.S. fuel consumption during the four weeks ended Nov. 21 was down 6.6 percent from a year earlier, the department said in a report last week.
Prices are also lower because OPEC ministers put off debate on a second cut in output in as many months during a Nov. 29 meeting in Cairo.
Prices plunged more than 9 percent yesterday after OPEC’s last meeting. OPEC will reduce crude production when it meets in Oran, Algeria, this month, OPEC Secretary General Abdalla el- Badri said yesterday.
A U.S. Energy Department report tomorrow will show that crude-oil supplies rose 1.2 million barrels last week, according to the median of 12 responses in a Bloomberg News survey. It would be the 10th consecutive weekly gain. Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, also rose, according to the survey.
Brent crude oil for January settlement declined $2.53, or 5.3 percent, to $45.44 a barrel on London’s ICE Futures Europe exchange, the lowest settlement since Feb. 15, 2005.