Oil falls under the $54 mark
Report: Drivers cutting road time
SIOUX FALLS, S.D. - Oil slipped below $54 a barrel yesterday as stock markets across the globe fell and yet another US government report illustrated the disarray in the housing market.
US motorists, stung by record gasoline prices, job losses, and falling home prices, left the roadways in droves, logging almost 11 billion fewer miles in September, according to the Transportation Department.
Governments, businesses, and consumers have slashed energy expenditures, which has halved the price of crude since record highs in July.
Light, sweet crude for December delivery fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange, about where prices were in January 2007.
Macro forces drove falling crude prices yesterday, said Fred Rozell, retail pricing director at the Oil Price Information Service, with investors selling off in a "herd mentality," much as they crowded into the market over the summer.
Yesterday, the Department of Transportation reported that Americans drove 90 billion fewer miles over the most recent 11 months. Rural interstate travel fell the most, with declines of 8 percent, compared with 4.4 percent nationwide.
That means $3 billion less was collected for bridge and transit projects between October 2007 and September 2008, Secretary of Transportation Mary E. Peters said.
The nationwide average price for regular gasoline is now $2.07 a gallon, down 33 cents since the start of the month, according to the Energy Information Agency, and well below record-highs above $4 per gallon this summer.
Supply disruptions that once roiled markets have failed to slow crude's decline as falling demand has supplanted supply issues as the gravitational force on Nymex.
Investors brushed off the hijacking of a Saudi supertanker carrying $100 million in crude this week. That ship is still under the control of Somalian pirates who are seeking a ransom.
Demand for gasoline over the four weeks ended Nov. 14 was 2.2 percent lower than a year earlier, averaging 9 million barrels a day, the EIA said in its weekly report.
Compared with summer highs, that has led to huge breaks at the pump, with average gasoline prices below $2 in a handful of states, from Texas to Minnesota.