Crude futures dip below $43 a barrel

Crude oil futures nose-dived for a second day in a row Thursday, briefly dipping below $43 a barrel, as traders focused on rising fuel supplies and the lack of cold weather. The two-day drop of more than $5 a barrel picked up momentum from technical and speculative trading and revealed a psychological shift in the market.

The price of oil is now more than $12 below the peak set in late October, while retail gasoline prices have fallen by 9 cents over the past month to $1.95 per gallon nationwide.

“You will see (gasoline) prices drift lower between now and Christmas by some five to 17 cents a gallon,” predicted Tom Kloza, director of Oil Price Information Service in Lakewood, N.J.

After falling as low as $42.50 per barrel, light, sweet crude for January delivery settled at $43.25 per barrel, a decline of $2.24 on the New York Mercantile Exchange. It’s the lowest settlement price since Sept. 10.

Heating oil futures plunged 7.21 cents to $1.2572 per gallon on the Nymex, more than 33 cents below their October peak, and natural gas futures fell 60.2 cents to $6.811 per 1,000 cubic feet. Gasoline futures slid 5.98 cents to $1.1414 per gallon.

Petroleum prices have been high all year due to strong global demand, a tight supply cushion and fears of output disruptions in Iraq, Nigeria and Russia. In September, a strong hurricane knocked out significant oil production in the Gulf of Mexico, though the region’s output is now recovering.

Plummeting oil prices over the past two days helped lift the stock prices of airlines such as AMR Corp. and Northwest Airlines Corp., which have been financially bruised by expensive jet fuel.