At the pump, a gallon of regular gasoline shed another 4 cents overnight to a new national average of $3.084, according to auto club AAA, the Oil Price Information Service and Wright Express. At this rate, the national average for gasoline could fall below $3 by the weekend - a level not seen since Feb. 16.
"It's dropping like a rock," said Fred Rozell, retail pricing director at the Oil Price Information Service in Wall, N.J.
Startled by crude's rapid drop, OPEC on Thursday announced it was moving up by almost a month an emergency meeting to discuss whether or not a production cut is needed. The Organization of the Petroleum Exporting Countries will now meet Oct. 24 at its headquarters in Vienna, Austria, instead of Nov. 18.
Oil market traders ignored the statement, convinced that prices are headed lower.
Light, sweet crude for November delivery dropped $4.69, or 6.2 percent, to settle at $69.85 a barrel on the New York Mercantile Exchange, the lowest settlement prices since Aug. 23, 2007. Earlier prices dipped to $68.57, a level not seen since June 27, 2007.
Crude has now fallen 52.5 percent since surging to a record $147.27 on July 11. Some energy analysts have predicted oil could fall as low as $50.
Thursday's declines accelerated after the U.S. Energy Information Administration said in its weekly report that crude stocks rose by 5.6 million barrels last week, well above the 3.1 million barrel increase expected by analysts surveyed by energy research firm Platts.
The EIA also says gasoline stock rose by 7 million barrels last week, more than double the build analysts had expected.
Demand for gasoline over the four weeks ended Oct. 10 was 5.2 percent lower than a year earlier, averaging nearly 8.8 million barrels a day, the EIA said.
"This report is playing right into the market's deepest fears, that the economy is slowing down and that demand is going to be nonexistent," said Phil Flynn, energy analyst at Alaron Trading Corp. in Chicago.
While U.S. energy supplies have been swelling because of falling demand, they've also grown as U.S. Gulf Coast energy installations continue to increase production after shutdowns caused by Hurricanes Ike and Gustav. That has helped to further drive down prices, especially for gasoline.
But analysts doubt a production cut by OPEC, which investors view as increasingly likely, would do much to suspend oil's free fall. OPEC's decision last month to cut production by 520,000 barrels a day hardly made a dent in oil prices.
"I think the market has already priced in another 500,000 barrel production cut and it doesn't care," Flynn said.
He said OPEC's decision to move up their extraordinary meeting underscores the cartel's anxiety about oil's stunning drop in value. Analysts believe several OPEC members, particularly Venezuela and Iran, budgeted their national spending based on oil at much higher levels, meaning they'll face substantial revenue shortfalls as prices come down.
"They're panicking," Flynn said. "If they come in and cut production and oil falls to $60, they're going to look like they've lost control, which they have."
Also weighing on prices Thursday was the expiration of November oil contract options at the end of the day, a trading cycle that often increases volatility.
In other Nymex trading, heating oil fell 10.62 cents to settle at $2.1108 a gallon, while gasoline futures lost 16.02 cents to settle at $1.622 a gallon. Natural gas futures fell 7.9 cents to settle at $7.215 per 1,000 cubic feet.
In London, November Brent crude fell $4.48 to settle at $66.32 a barrel on the Ice Futures exchange.
