Oil prices tumbled below $49 a barrel Monday as unease about the economy - from Asia to America - raised doubts about the global appetite for energy.
Benchmark crude for May delivery fell more than 7.6 percent, or $3.97, to settle at $48.41 on the New York Mercantile Exchange.
In London, Brent prices fell $3.19 to settle at $47.99 a barrel on the ICE Futures exchange.
Gasoline futures plunged more than 10 cents a gallon.
Jim Ritterbusch, president of energy consulting group Ritterbusch and Associates, said he expects oil to fall as low as $47 in advance of the U.S. crude inventory report, the monthly unemployment report and a meeting of the Group of 20 world leaders in London, all this week.
"Late in the week, all hell could break loose, but I don't know whether it makes the market go up or down," Ritterbusch said.
Most energy-market analysts found no fundamental reason for a rally this month that pushed oil prices from $40 per barrel to more than $50.
Crude inventories continue to build even with OPEC cutting production and domestic producers suspending oil projects.
Oil prices have moved higher as a spate of positive economic news heartened investors.
Just last week, markets rallied behind word of a new plan to resolve the nation's banking crisis and a report that consumer spending rose in February for a second straight month.
"None of these burned a single hydrocarbon or pulled a single gallon (of gasoline) from storage," the energy consultancy Cameron Hanover said in a note to clients Monday.
"By Friday, it was just too much macroeconomic news and not enough oil fundamental news that had pushed prices higher."
Traders began to sell positions on the final day of the week.
U.S. stock markets got off to a rocky start Monday after the White House rejected turnaround plans from General Motors Corp. and Chrysler.
The Dow Jones industrial average fell 300 points in late afternoon trading.
Losses by major corporations, from banking to the industrial sector, have boosted the amount of oil held in storage and weighed on prices.
The U.S. government last week said crude storage facilities were brimming with more oil than they've had in 16 years.
Combined with the strategic petroleum reserve, the nation now has 1.05 billion barrels of oil in storage - enough to fuel roughly 44 million cars for a year.
"You can't swing a cat without hitting a barrel of crude oil in the United States," analyst Stephen Schork said in his daily markets report Monday.
Crude is piling up as airlines, manufacturers, automakers and just about every other sector slow down and millions of workers lose their jobs. U.S. stores of natural gas also rose by 3 billion cubic feet to about 1.65 trillion cubic feet for the week ended March 20.
Natural gas prices have fallen to levels last seen nearly seven years ago as industries cut costs and slow factory production.
The Organization of Petroleum Exporting Countries has promised to slash production by 4.2 million barrels per day, but analysts are at odds about the level of compliance by OPEC members.
JBC Energy in Vienna cited data from tanker-tracking agency Petrologistics showing that March crude oil production from 11 OPEC nations would total 25.9 million barrels a day, more than 1 million barrels higher than the group's implied output ceiling of 24.845 million barrels a day.
Comments Monday by Qatar's oil minister suggested OPEC members may be facing a new reality because of a widespread recession.
Abdullah bin Hamad al-Attiyah said he was "OK" with crude prices around $50 a barrel for 2009 and was "trying to be more pragmatic" regarding the global crisis and its effects on oil prices.
Just two weeks ago as OPEC ministers gathered in Vienna, Austria, there was still talk of $70 oil.
In other Nymex trading, gasoline for April delivery tumbled 10.8 cents to settle at $1.3799 a gallon while heating oil slipped 9.02 cents to settle at $1.3426 a gallon.
Natural gas for May delivery rose less than a penny to settle at $3.739 per 1,000 cubic feet. - AP