Crude Oil Drops to January 2007 Levels

Oil investors have already priced in a recession in developed countries and only evidence of an especially severe or prolonged slowdown may push prices down further, Chu said.

Analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark.

"I don't see oil falling below $50," Chu said. "It should be above $60 in a couple weeks."

The Organization of Petroleum Exporting Countries is holding an informal meeting later this month ahead of its regular December meeting. OPEC President Chakib Khelil has said the group will wait until the effects of a 1.5 million-barrel-per-day production cut plays out and that another cut on Nov. 29 is unlikely.

More hawkish OPEC members like Iran have called for immediate production cuts and some analysts believe they may get them if oil falls below $50.

In other Nymex trading, gasoline futures slipped about 3 cents to settle at $1.107 a gallon. Heating oil rose less than a penny to settle at $1.7597 a gallon while natural gas for December delivery jumped 22.7 cents to settle at $6.743 per 1,000 cubic feet.

In London, January Brent crude fell 12 cents to settle at $51.72 on the ICE Futures exchange.

Associated Press writers George Jahn in Vienna, Austria, and Alex Kennedy in Singapore contributed to this report.