COLUMBUS, Ohio (AP) - Oil prices dipped again Tuesday and gas prices hit their lowest levels since January 2005 with the United States officially in a recession.
Analysts say prices at the pump may be bottoming out, though demand could fall even further in January with job losses reducing the number of people who drive to work.
Gas prices fell for the 20th week since the July 4th holiday and hit $1.811 per gallon, according to the government's Energy Information Agency.
Auto club AAA, the Oil Price Information Service and Wright Express said prices fell 0.8 cents overnight to $1.812, down 62.4 cents in the past month and $1.249 in the past year.
Light, sweet crude for January delivery fell 72 cents to $48.56 a barrel on the New York Mercantile Exchange. Earlier Tuesday prices briefly fell to $47.36, the lowest since 2005.
In London, January Brent crude slid 94 cents to $47.03 on the ICE Futures exchange.
Analyst Peter Beutel of Cameron Hanover said everyone is searching for the bottom in the oil market.
"Right now, everyone is wondering when is this market going to rally," he said. "At some point it should."
The National Bureau of Economic Research, a private, nonprofit research organization, said Monday that its group of academic economists who determine business cycles met and decided that the U.S. recession began last December.
The slowing economy has cut into energy demand, leaving OPEC's power to control prices through production cuts diminished.
The head of OPEC said Tuesday that he hopes oil producing nations such as Russia will join the group, or at least agree to output cuts to help spark a rally in prices.
Chakib Khelil, also Algeria's oil minister, said oil producers such as Russia, Norway and Mexico should express their solidarity with Organization of Petroleum Exporting Countries, either by joining the cartel or by following its reductions of output quotas.
OPEC Secretary-General Abdullah El-Badri said the group would likely reduce output quotas by between 1 million and 1.5 million barrels at a meeting on Dec. 17 in Algeria, according to a report on Iranian state television Monday.
OPEC, which accounts for about 40 percent of global supply, cut output by 1.5 million barrels a day in October, bringing total cuts to around 2 million barrels a day this year.
In other Nymex trading, gasoline futures fell 2.52 cents to $1.086 a gallon. Heating oil fell about a half cent to 1.6111 a gallon while natural gas for January delivery fell 16 cents to $6.444 per 1,000 cubic feet.
Associated Press writers Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report. |