Crude Follows Wall Street's Wild Ride

It had virtually no effect on tumbling crude prices.

Before the rally, crude has fallen 12% this week alone under a daily barrage of economic predictions that industries and consumers have cut back on spending. Gasoline prices have fallen nearly 50% since hitting a record national average of $4.11 per gallon in July.

While tumbling gas prices are a relief for consumers who have been shaken by job losses and declining home prices, economists now fear that the resulting decline in exploration and production by oil companies will lead to a massive price spike when economies rebound.

On Thursday, the Labor Department reported a larger-than-expected jump in unemployment claims and Wal-Mart (WMT Quote), the world's largest retailer and a barometer for consumer spending, cut its full-year outlook.

On Wednesday, the price of crude for December delivery fell for the 59th time since the peaking of the July bubble when prices hit a $147 a barrel, with the contract falling an average $1.09 per barrel over the last 88 sessions, according to information complied by trader and analyst Stephen Schork.

On Thursday, the Organization for Economic Cooperation and Development said the U.S., Europe and Japan are in a recession, the first time all three have been in a downturn together since 1974-75 when Western nations were under duress from an Arab oil embargo and a severe bear market for stocks.

The Paris-based group said the U.S. economy would contract next year by 0.9%, Japan's by 0.1% and the euro area by 0.5%. It said the gross domestic product was likely to fall by 0.3% in 2009 for its 30 member countries, representing democracies with market economies.