NEW YORK – U.S. oil prices resumed their slide on Tuesday afternoon as jittery markets saw OPEC toothless to shore up prices amid the threat of a global recession.
An overnight bounce of about a dollar evaporated after Saudi Arabia, the world's largest producer, said it is the market, not the cartel, that sets prices.
Profit-takers moved in, pushing oil prices to its lowest in 23 months as the nervous market suffered its seventh straight day of losses. In that seven-day stretch, oil prices have fallen 27 percent.
On Monday, U.S. oil prices fell almost $4 for the largest daily slide since the Gulf War in 1991.
U.S. crude for November delivery settled at $21.81 a barrel, losing 20 cents or nearly 1 percent on the day on the New York Mercantile Exchange.
OPEC meets in Vienna on Wednesday, but the cartel has no immediate remedy to curb the fall in oil prices that threatens to ruin the cartel's successful two-year strategy to keep price in a range between $22 and $28 a barrel.
OPEC is not expected to alter crude supply quotas unchanged. Crude prices fell again late Tuesday when the American Petroleum Institute released its weekly industry report showing a less than expected drop in national crude supplies and a whopping 8.7 million barrels fall in gasoline supplies.
People simply didn't drive much in the week after the Sept. 11 airliner hijackings and attacks, said oil analyst Tim Evans of IFR-Pegasus in New York.
On the week summer started in June, wholesale gasoline futures prices were $1.04 a gallon. Wholesale gasoline futures ended Tuesday at 62 cents a gallon.
Still, retail gasoline prices were only about a nickel different from summer's beginning to its end, and stood at $1.51 a gallon for self service regular on Tuesday, according to the American Automobile Association.
Iraqi oil exports rose to a robust 2.3 million barrels per day (bpd) in the week ended Sept. 21, showing that exports are thus far not hindered by a military buildup in the Gulf region.
Economic news continued to be cloudy. U.S. consumer confidence fell sharply in September, suffering its largest one-month drop since October 1990, during the Gulf crisis, according to a survey by the Conference Board, a private business research group in New York.
The survey captured part of the economic shock from the Sept. 11 attacks on New York City and the Pentagon.
"While consumers have managed to keep the U.S. out of a recession for several years now, that soon may no longer be the case," the research group said.