Oil prices sink below $92 on Wall Street tumult

Gas prices are expected to fall in the coming weeks.

STAFF/WIRE REPORT

In the aftermath of Hurricane Ike, Ohio gasoline prices are again knocking on the door of $4 a gallon.

The statewide average for regular rose another nickel Tuesday to $3.99, according to AAA and the Oil Price Information Service.

One month ago, the average was $3.68 in Ohio.

Prices in the Mahoning Valley averaged $3.91, the lowest in the state.

Gas prices have been spiking nationwide because of fears of shortages due to Ike. At least 14 Texas refineries closed before the hurricane made landfall, which has caused some supply disruptions.

Gas prices are expected to turn lower within a few weeks, however, because of the falling price of oil.

Oil prices this week shed $10 a barrel in a violent, two-day slide as tumult on Wall Street dims hopes for a swift economic recovery and signals another drop in U.S. energy demand.

Crude, which shot up near $150 a barrel only two months ago, is now down 8 percent for the year.

As uncertainty grips Wall Street, evidence mounted that U.S. consumers and businesses were bracing for a protracted economic downturn that should guarantee more of the money-saving energy conservation measures of the past year: Americans will cut back on driving, airlines will keep fewer planes in the air and U.S. manufacturers will be shipping fewer products. That in turn was expected to keep crude prices down.

“The economic slowdown is completely unavoidable now and people will be driving less, trucking less and buying less,” said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com. “Energy consumption will fall dramatically.”

Light, sweet crude for October delivery fell $4.56 to settle at $91.15 a barrel on the New York Mercantile Exchange, after earlier dipping to $90.51, its lowest level since Feb. 8. On Monday, prices closed below $100 for the first time in six months, shedding more than $5 and wiping out all of oil’s gains for the year.

Crude has fallen about $55 — or 37 percent — since shooting above $147 on July 11.