NEW YORK - Oil prices fell Tuesday, a day before the government releases its weekly crude inventory report that recently has shown in stark numbers how much Americans are cutting back on energy costs.
Although oil prices typically decline in the fall, analysts expect the prices to continue falling, perhaps as low as $50 a barrel, before they hit bottom.
Light, sweet crude for December delivery fell 49 cents to settle at $62.73 a barrel on the New York Mercantile Exchange, the lowest closing price since May 15, 2007.
U.S. crude stockpile increases have been greater than expected every week in October, which has led to rapid selloffs in the oil markets. Demand is off about 7 percent compared with last year, said Fred Rozell, retail pricing director at Oil Price Information Service. The U.S. Transportation Department reported the biggest monthly decline in miles driven since World War II on Friday.
Consumer pullbacks are showing up in the U.S. crude inventory reports released each Wednesday, with unexpected builds catching investors off guard.
Prices have continued to fall despite an announcement last week that OPEC would cut oil production by 1.5-million barrels a day. The Organization of Petroleum Exporting Countries, which controls about 40 percent of global crude oil production, has not ruled out another cut when it meets in December.
OPEC members warned Tuesday that low oil prices have created a crisis situation that threatens key investment in production. But many analysts say OPEC has lost its grip on oil prices, and that it is demand, not supply, that is driving crude down.