NEW YORK -- Oil prices tumbled to five-week lows Monday on growing evidence of an extended recession that could mean demand for energy will remain weak for some time.
Benchmark crude for August delivery fell $2.43 _ nearly 4 percent _ to $64.30 a barrel on the New York Mercantile Exchange.
It was the fourth straight day of declines on Nymex and since the beginning of the month, crude prices have fallen about 8 percent. Prices fell as low as $63.40 Monday.
Natural gas prices plunged as well.
Major energy users, like industrial manufacturers, have been hit hard by the recession and unemployment data released last week in both the U.S. and Europe doused hopes for a quick recovery.
"The recent evidence concerning the U.S. economy is terrible. The news regarding Europe seems no better," said economist Philip Verleger. "This suggests oil use will continue to decline for another year."
Oil prices had been rising for months on the belief that the economy would improve by the end of the year. Prices have also been pushed higher by the weak U.S. currency.
Because crude is bought and sold in dollars, it essentially becomes cheaper when the dollar falls against other currencies. And the dollar has fallen steadily with the U.S. government spending billions to prop up major banks and the U.S. auto industry.
Still, spiking energy prices have baffled experts because demand for everything from crude to gasoline is dismal. The U.S. is mired in recession and Americans are driving billions fewer miles than they have in past years.
Retail gasoline prices rose every day for nearly two months as refiners slashed production. That streak finally ended two weeks ago and prices at the pump have fallen every day since.
Gasoline prices fell again overnight to a new national average of $2.611 a gallon, according to the Oil Price Information Service and AAA.
In other Nymex trading, gasoline for August delivery fell 4.9 cents to $1.7415 a gallon and heating oil slid 5.77 cents to $1.6439. Natural gas for August delivery shed 8 cents to $3.537 per 1,000 cubic feet.
In London, Brent prices dropped $1.57 to $64.04 a barrel on the ICE Futures exchange.
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Associated Press writers Alex Kennedy in Singapore and Pablo Gorondi in Budapest contributed to this report.
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