NEW YORK - Oil prices dropped below $52 a barrel to new 19-month lows yesterday on a report that Saudi Arabia, OPEC's largest producer, said further production cuts were not necessary right now.
Crude oil has fallen more than 16 percent this year in a sell-off triggered by a historically warm winter in the northern United States and sustained by large funds taking short positions in the market, or bets that prices will fall.
Some market participants believe that another production cut by the Organization of Petroleum Exporting Countries could halt the price drop, but until that happens, there is little to stop prices from sliding further.
"It doesn't feel like it's run its course yet. It will probably fall below $50 a barrel - then the Saudis may be more amenable to an emergency meeting," said Jim Ritterbusch, president of Ritterbusch & Associates, an oil-trading advisory firm in Galena, Ill.
Light, sweet crude futures for February fell $1.78 to settle at $51.21 on the New York Mercantile Exchange, after hitting a low of $50.53 in earlier trading. Yesterday's settlement price was the lowest since May 26, 2005, when crude closed at $51.01.
Nymex heating oil slid 2.33 cents to settle at $1.4803 per gallon; gasoline fell 6.27 cents to settle at $1.3693; and natural gas futures inched up 3.7 cents to settle at $6.638 per 1,000 cubic feet.
February Brent crude fell 86 cents to settle at $52.26 yesterday on London's ICE futures exchange.
The U.S. retail price of gasoline has fallen 4.5 percent in 2007 to an average of $2.229 a gallon, according to AAA. As of yesterday, more than half of U.S. states were seeing average pump prices of less than $2 a gallon.