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Oil Prices Drop, Raising Fears for Recession

Crude oil dropped below $59 a barrel in New York trading Tuesday on continued bad economic news in the United States, the world's largest energy consumer, and fears of a global recession.

The price of a barrel of crude oil for future delivery declined $3.40 cents to $59.1 on the New York Mercantile Exchange. Futures touched $58.32, the lowest price since March 2007.

Oil prices are down 60 percent since hitting an all-time high in July. They are also off about one-third from this time last year.

A survey shows that retail gasoline prices also declined from a record high of $1.8 a liter in July, to the current price of 58 cents a liter.

Bloomberg News reports the International Energy Agency (IEA - an adviser to 28 oil-consuming nations) may cut its 2009 oil demand forecast again. The report says the threat of the worst recession since World War II will sap fuel consumption.

Some information for this report was provided by AFP and Bloomberg.