The stunning collapse in oil markets accelerated on Friday, sending a barrel of crude plunging below $US78 as investors grew more pessimistic about the resolution of the global economic crisis.
Oil hasn't been this cheap in 13 months - a rare silver lining for consumers amid a rapidly imploding financial landscape.
Crude prices have been cut almost in half since surging to a record near $US150 barrel over the summer.
Energy experts believe prices could go even lower.
Light, sweet crude for November delivery ended the day $US8.89 lower at $US77.70 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month crude contract since September 10, 2007. In London, November Brent crude lost $US8.57 to settle at $US74.09 a barrel on the ICE Futures exchange.
Oil has now lost 47 per cent of its value since hitting a record $US147.27 on July 11 as a deepening credit crisis sparked by the subprime mortgage fiasco wreaks havoc around the globe and drives down energy demand.
The International Energy Agency on Friday cut its global oil demand forecasts for this year and 2009, pointing to the worsening economic conditions and the tight credit supply.
In other Nymex trading, heating oil futures lost 20.86 cents to settle at $US2.21 a gallon, while gasoline futures fell 22.03 cents to settle at $US1.807 a gallon. Natural gas futures fell 29 cents to settle at $US6.535 per 1,000 cubic feet.
Gold and silver plummeted on Friday after Wall Street posted another big loss and forced investors to dump holdings in precious metals to raise badly needed cash.
Gold for December delivery fell $US27.50, or 3.1 per cent, to settle at $US859 an ounce on the New York Mercantile Exchange, earlier falling as low as $US829. The metal has dropped for two straight sessions, at least temporarily halting a big move upward as investors shifted funds into gold and silver to take advantage of their perceived safe-haven appeal.
But as US stocks continue to slide, large institutional investors have been forced to sell gold and other commodities to meet margin calls and other requirements. In a margin call, investors who borrowed money to buy stocks are forced to repay the loans.
Other precious metals also fell. December silver lost $US1.275, or 10.6 per cent, to settle at $US10.60 an ounce on the Nymex, while December copper lost 26.15 cents, or 10.87 per cent, to $US2.1445 a pound.
