Oil closes below $100 for first time in 6 months

NEW YORK -- Oil prices closed below $100 a barrel for the first time in six months Monday, tumbling in another dramatic sell-off as worries about the U.S. economy deepened.

Crude prices shed more than $5 a barrel and have now given up virtually all their gains for the year, extending a steep, two-month slide from record levels above $147 a barrel.

Oil's pullback also came as early signs suggested that Hurricane Ike delivered less damage than feared to the Gulf Coast energy oil and gas infrastructure. But pump prices jumped above $4 a gallon in parts of the country as a precautionary shutdown of Gulf refineries caused gasoline shortages.

Light, sweet crude for October delivery fell $5.47 to settle at $95.71 a barrel on the New York Mercantile Exchange -- oil's first settlement under $100 since March 4. Earlier, prices dipped to $94.13, the lowest trading level in seven months. The sell-off gained momentum in aftermarket trading as prices fell more than $6.50.

Crude has fallen more than $50 -- or 35 percent -- from its all-time trading record of $147.27 reached July 11 as a global economic slowdown continues to weigh on demand for energy.

Other commodities traded mixed Monday, with energy futures down but gold, silver and most grains trading higher.

Investors were also awaiting damage assessments to Gulf energy infrastructure after Ike's passage.

U.S. officials said Sunday that Ike destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico. But that represents only a small portion of the 3,800 production platforms in the Gulf and pales in comparison to the catastrophic damage to energy infrastructure doled out by Hurricanes Katrina and Rita three years ago.

"Fears of widespread refinery damage have been allayed considerably and a number of facilities are coming back up in a timely fashion," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

Still, power outages along the Gulf Coast were slowing efforts to restart some refineries. Meanwhile, virtually all oil production in the Gulf and about 94 percent of natural gas output remained shut-in Monday, according to the U.S. Minerals Management Service.

The shutdown of Gulf refineries sent wholesale gasoline prices spiking last week and pushed pump prices back above $4 a gallon in South Carolina, Alabama, Georgia and other states. Gasoline shortages were reported in Maryland, Virginia and North Carolina.

On Monday, a gallon of regular rose half a penny overnight to a new national average of $3.842 -- up 16.7 cents from Friday, according to auto club AAA, the Oil Price Information Service and Wright Express.

Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., said supply shortages caused by Ike and Hurricane Gustav should last at least another two weeks.

"That means we're looking at close to $4 a gallon for the rest of September," Kloza said. "People are going to observe more of this disconnect where retail prices move higher even though crude oil is trading below $100 a barrel."

Also adding to the selling pressure Monday was a slightly stronger dollar. A rising greenback encourages investors to unload commodities bought as a hedge against inflation or weakness in the U.S. currency.

Oil fell despite reports that militants have launched another attack Nigeria's oil infrastructure in a third day of violence.

In other Nymex trading, heating oil futures fell 14.79 cents to settle at $2.7912 a gallon, while gasoline prices dropped 20.82 cents to settle at $2.5614 a gallon. Natural gas for October delivery rose about a penny to settle at $7.374 per 1,000 cubic feet.

In London, October Brent crude fell $5.20 to settle at $92.38 a barrel on the ICE Futures exchange.

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Associated Press Writers Louise Watt in London and Alex Kennedy in Singapore contributed to this report.