Oil Prices Plunge Below $100 A Barrel

What's up with oil? Certainly not the price. In an almost unbelievable turnabout, the price of a barrel of crude plunged more than eight percent Thursday.

Oil prices have been in decline for most of the week, falling along with gold and silver prices, both of which recently hit record highs. Other commodity prices have also recently given up big gains.

Suddenly, the markets have gone from worrying about inflation to worrying about the economy. Today's economic reports seemed to add to the worry. Weekly jobless claims were unexpectedly high and data from Clear Capital confirms housing prices have dipped below their March 2009 lows.

U.S. crude oil traded below $100 a barrel in today's trading while Brent crude for June delivery was trading around the $110 mark, the fourth day it had lost ground.

It remains to be seen how long the oil price decline lasts and how low the price will go, but it should be very good news indeed for motorists, at least in the short run. The national average price of a gallon of self-serve regular today is $3.985, just a cent and a half shy of $4, according to AAA.

Normally gasoline prices follow the general direction oil prices take, though the change isn't always immediate. Lower prices at the pump may not show up for a few days.

Many analysts attribute the change in market conditions to the Federal Reserve's announcement last week that its policy of Quantitative Easing will end on schedule in June. Since then the U.S. dollar has gained strength and commodities like oil and precious metals – traditional inflation plays – have begun to fall.