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Oil Prices At 3-Year Low; States See Gas Under $2

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The Associated Press

Published: November 21, 2008

COLUMBUS, Ohio - Oil prices on Thursday hit levels not seen in more than three years and retail gasoline prices are now below $2 across nearly half of the country on dour economic reports suggesting a painful economic pullback.

Benchmark crude fell as low as $48.50 a barrel on the New York Mercantile Exchange, levels last seen on May 18, 2005, when oil hit $46.80 a barrel.

Meanwhile, prices at the pump fell again overnight nationally near $2 a gallon, with the average price in 23 states even less than that.

"After this summer, this is wonderful ... wonderful," said Anuj Dayal, a cab driver in New York's Hell's Kitchen neighborhood. "I hope gas is $1 soon. I hope it's free."

Gasoline prices have been halved since reaching a record above $4 in July, but relief from record crude prices have come amid a global economic meltdown.

December's contract for light, sweet crude fell 7 percent, or $4, to settle at $49.62 in Nymex trading.

Oil prices have fallen 66 percent since hitting a record $147.27 a barrel in mid-July.
Oil analyst Stephen Schork wondered whether $50 would even hold.

"Maybe $50 is too conservative given the putrid, putrid look at the economy," he said.

"If we're not out of these doldrums nine months from now we're looking at $30 oil."
Schork said he expects buyers to put the oil into storage and that inventories will continue to build.

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