NEW YORK — Oil prices tumbled below $130 a barrel for the first time in more than a month Thursday, as crude's dramatic slide entered a third day accompanied by a sharp sell-off in natural gas.
The declines accelerated amid growing concerns that the weakening economy and creeping inflation are eroding demand for fossil fuels in the U.S. and other large energy-consuming nations.
Oil is now more than 10 percent cheaper per barrel than it was on Monday; natural gas prices are down more than 20 percent just since the Fourth of July. Still, experts are not convinced that prices have turned a corner.
"There's no bell that tells you when the market has turned," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.
Light, sweet crude for August delivery dropped $5.31 and settled at $129.29 a barrel on the New York Mercantile Exchange. Prices have fallen nearly $16 in just the past three days.
"We're seeing some worries about demand destruction in oil, so I think that's creating some fear among investors and leading them to sell," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago.
Some market observers have said last Friday's record above $147 a barrel could represent a peak price for oil, at least for the time being. But like a number of others, Pawlicki was reluctant to say whether the market's latest swoon represented a lasting shift.
"I think it's too early to call a top to this market," Pawlicki said.
Crude's drop weighed heavily on other commodities Thursday, with gold, silver, soybeans, corn and other agriculture futures all ending sharply lower.
Stocks rallied for the second day. That fueled speculation among some analysts that large investors are pulling money out of oil and other commodities — which had been seen as safe havens given the financial turmoil of the past year — and pumping it back into the beaten-down stock market.
Reports of a pre-dawn explosion that damaged an oil pipeline in Nigeria's restive south — the sort of threat to supply that has helped fuel crude's recent rally — did little to prop up prices Thursday.
Attacks on oil industry infrastructure in the past two years have slashed oil output by almost a quarter in Nigeria, Africa's top crude producer.
At the pump, prices held steady at a record $4.114 a gallon, according to AAA, the Oil Price Information Service and Wright Express. Diesel rose to a record of $4.845, up more than half a penny.
In other Nymex trading, heating oil fell 9.72 cents and settled at $3.7438 a gallon, while gasoline futures fell 11.61 cents and settled at $3.1633.
Brent crude for September delivery fell $5.12 and settled at $131.07 on the ICE Futures Exchange in London.
Natural gas futures for August delivery fell more than 8 percent Thursday, marking their biggest one-day drop in nearly a year, according to Nathan Golz, researcher at Wachovia Securities in St. Louis. Prices for the key heating, cooking and power generation fuel settled 86.1 cents lower at $10.537, their lowest point since April.
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