Oil prices tumbled to the lowest level in more than eight months and retail gasoline prices slipped amid concerns about a double-dip recession and Standard & Poor's downgrade last week of the U.S. credit rating.
The U.S. benchmark grade of crude, West Texas Intermediate, plunged $5.57 to close Monday at $81.31 a barrel on the New York Mercantile Exchange. That was its lowest close since Nov. 23.
The European trading benchmark, Brent North Sea crude, dropped $5.63 to settle at $103.74 a barrel on the ICE Futures Exchange in London.
Nationally, the average retail price for regular gasoline fell 3.7 cents to $3.674 a gallon Monday, after five weeks of price increases, according to the Energy Department's weekly survey of service stations. Last year at this time, the U.S. average was 89.1 cents lower, at $2.783.
In California, the average price had been declining and as of Monday had fallen 1.3 cents from the previous week to $3.798 a gallon. A year earlier, the state's average was 62.6 cents lower, at $3.172.
Tom Kloza, chief oil analyst for the Oil Price Information Service, said the wholesale price of California's cleaner-burning gasoline had dropped to $2.65 a gallon Monday from $2.90 a gallon two weeks earlier. Normally, pump prices are about 60 cents higher than the wholesale price because of taxes and fees.
"California is going to be looking at price relief at the pump," Kloza said.