NEW YORK (AP) - The price of oil dropped below $90 per barrel Wednesday, the latest milestone in a weekslong decline brought on by uncertainty surrounding economies from Europe to China.
Benchmark U.S. crude fell by $1.95 to end at $89.90 per barrel. Oil has tumbled more than 15 percent this month and is at its lowest level since Oct. 21. Other commodities such as copper and cotton fell sharply as well. Stocks markets in Asia and Europe fell sharply, while U.S. markets erased most losses with a late-day rally.
Analysts say oil is in an extended slump that should lead to cheaper gasoline and other petroleum-based fuels this summer. Gasoline, which is made from oil, already has dropped by nearly 26 cents per gallon since early April. The national average is now $3.68 per gallon; some experts say it could fall as low as $3.50 by Independence Day. The average price of diesel fuel is below $4 for the first time since February. It's good news for an economy that has slowed down since last year's fourth quarter.
"This is a good thing for the consumer, that's for sure," independent oil analyst Andrew Lipow said.
Sterne Agee analyst Tim Rezvan cut his forecast for the average price of oil this year by 8 percent to $99 per barrel.
Oil's recent decline has reversed the sharp increase seen in the winter. Traders boosted the price as Iran clashed with Western nations over its nuclear program. Some estimated the impasse added $15 to $20 to the price of oil.