NEW YORK (AP) -- Oil prices closed at their lowest level in a year Thursday, falling below $85 a barrel even after OPEC signaled it may try to slow crude's downward spiral by cutting production. At the pump, retail gas prices kept falling, with a gallon of regular shedding 4.4 cents overnight to a new national average of $3.403, according to auto club AAA, the Oil Price Information Service and Wright Express.In Oklahoma, regular gas dropped to an average of $2.987 a gallon, the first time average prices have fallen below $3 in any state since Feb. 21, said Fred Rozell, director of retail pricing at the Oil Price Information Service in Wall, N.J. "Barring some sort of major event, it looks like we'll see $3 gas as the national average in the next few weeks," Rozell said.
Light, sweet crude for November Delivery fell $1.81 to settle at $86.62 a barrel on the New York Mercantile Exchange, the lowest closing price since Oct. 15, 2007. In aftermarket trading, prices edged below $85, a key technical level that traders say could signal another plunge. In London, November Brent crude fell $1.70 to settle at $82.66 on the ICE Futures exchange, after earlier falling to a one-year low of $80.40.
Crude has shed about $60 -- or 40 percent of its value -- since soaring to a record $147.27 on July 11. The massive losses come as a global financial downturn forces people and businesses everywhere to cut back. Overall demand for oil fell for a fifth straight week and year-on-year demand fell for a 24th straight week" this year, noted trader and analyst Stephen Schork in his Schork Report. "In fact last week demand ... fell to the lowest level since the week following the 9/11/2001 attacks."
Demand for gasoline was also weaker, falling 5.3 percentage points over the four weeks ended Oct. 3 compared to the same period a year earlier, according to the EIA report.
In other Nymex trading, heating oil futures fell 7.59 cents to settle at $2.4186 a gallon, while gasoline futures fell less than half a penny to $2.0273 a gallon. Natural gas for November delivery rose 8.3 cents to settle at $6.825 per 1,000 cubic feet.