A worsening economic climate pushed crude futures downward and depressed gasoline futures even further Monday, one bit of good news for consumers amid a flurry of dour economic reports.
Gasoline futures tumbled nearly 9 percent with the release of the latest data suggesting to economists that the United States is in recession.
Manufacturers reported lethargic activity numbers for October, showing the worst reading in more than a quarter-century, according to the Institute for Supply Management. The group reported that the manufacturing index fell to 38.9. Any reading below 50 signals contraction.
The last time the ISM released similar numbers, in September 1982, the nation was in a deep recession.
After trading above $69 per barrel, light, sweet crude for December delivery tumbled $3.87 to settle at $63.91 on the New York Mercantile Exchange.
Declining gasoline futures have led to sharp drops in the price of gasoline. The price for a regular gallon of gasoline dropped to $2.41 nationally on Monday, down more than 30 percent from last month, according to auto club AAA, the Oil Price Information Service and Wright Express.
Gas was selling for as little as $1.93 a gallon in Tulsa, Okla.
A prominent Canadian economist even suggested oil prices have been overlooked as a trigger for the global economic slowdown.
CIBC World Markets economist Jeff Rubin said Monday that four of the past five global recessions were preceded by an oil shock, and this time it’s no different.
Rubin said if triple-digit oil prices started the recession, then $60 oil prices may be what ends it.
Oil industry analysts had believed the booming economies of India and China would pick up slackening of demand if Western nations went into recession. That view has weakened as the economic crisis in the United States spread across the globe.
In a report that seemed to parallel dire numbers in the ISM report, Credit Suisse on Monday forecast the sharpest drop in global oil demand since 1982.
