From Deseret News archives:
Oil at 3-year lows; gas below $2 in 23 states
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 close to $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.
New claims for unemployment benefits jumped last week to a 16-year high and U.S. stock markets hit multiyear lows.
"Until we get past this malaise and gloom and doom, no one wants to step up and buy this market," said Mike Zarembski, senior commodity analyst at OptionsXpress.
The government said Thursday that new applications for jobless benefits exceeded estimates of Wall Street economists, rising to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. A survey of economists by Thomson Reuters expected 505,000.
That is the highest level of claims since July 1992 when the U.S. economy was coming out of a recession, according the Labor Department.
The four-week average of claims, which smooths out fluctuations, was even worse: it rose to 506,500, the highest in more than 25 years.
In addition, the number of people continuing to claim unemployment insurance rose sharply for the third straight week to more than 4 million, the highest since December 1982, when the economy was in a painful recession.
Light, sweet crude for December delivery fell 7 percent, or $4, to settle at $49.62 in Nymex trading.
Oil prices have fallen 66 percent since reaching a record $147.27 a barrel in mid-July.
Oil analyst Stephen Schork wondered if $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 of that December contract to put the oil into storage and that inventories will continue to build.
The Energy Department's Energy Information Administration also reported Thursday that natural gas storage levels far exceeded expectations, driving prices sharply downward.
