NEW YORK - Oil prices ended the week with a modest rally Friday but couldn’t erase one ugly October: Crude capped its biggest monthly drop since futures trading began 25 years ago, weighed down as a deflated U.S. economy crushes demand for fuel.
Oil’s huge collapse — prices fell 32 percent for the month — has stunned oil-producing countries while giving cash-strapped U.S. consumers a rare dose of relief. Pump prices have fallen by half since their summer peak above $4 a gallon — a drop that’s expected to result in a staggering $100 billion in annual savings for American households.
“That’s a pretty powerful stimulus to consumers,” said Adam Sieminski, chief energy economist at Deutsche Bank Global Markets in Washington.
Light, sweet crude for December delivery rose $1.85 to settle at $67.81 a barrel on the New York Mercantile Exchange, after earlier falling as low as $63.12.
Prices closed at $100.64 a barrel on the last trading day in September. That gives oil the biggest monthly slide since the launch of the Nymex crude futures contract in 1983. The previous record was a 30 percent drop set in February 1986.
Crude hit a record price of $147.27 set on July 11.
“We’re seeing a huge paradigm shift,” said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill. “We went from $100 at the beginning of the month to around $65 today. It’s quite a decline and shows how weak the demand picture really is.”
In August, Americans drove 15 billion fewer miles than they had in the same month the previous year, the largest single month decline since World War II, when figures were first collected regularly.
At the pump, a gallon of regular gasoline fell another 4.3 cents overnight to a new national average of $2.504, according to AAA.