Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, said even the continuing cold weather and a falling dollar haven't been enough to sustain a rally.
"I think the concerns about economic weakness still seem to be overshadowing the entire complex," Flynn said.
Toyota Motor Corp. projected its first-ever operating loss, acknowledging Monday that its nine-year stretch of global vehicle-sales growth had stalled.
Crashing auto demand, especially in its key U.S. market, proved too much for Japan's top automaker, which had been reporting huge sales numbers from its fuel-efficient models, including the Camry sedan and Prius gas-electric hybrid.
Caterpillar Inc. said Monday it would cut executive pay by up to 50 percent next year because of weakening demand.
The world's largest maker of mining and construction equipment also said it would slash pay for senior managers between 5 percent to 35 percent in 2009.
Crude producers have not been able to cut output fast enough.
The Organization of Petroleum Exporting Countries said last week it would slash production by 2.2 million barrels a day in its largest cutback ever, trying to stem the rapid price decline.
But oil trader and analyst Stephen Schork said in order for OPEC to adhere to its January quota, the cartel first must adhere to its November cut of 1.5 million barrels a day.
"Given crude oil's weakness since OPEC's announcement, it is safe to assume the market is a bit skeptical regarding the group's ability to comply," Schork wrote in his daily publication, The Schork Report.
OPEC leaders say if crude prices do not return to around $70, exploration and production could be cut. That, many experts warn, could lead to future price shocks when the economy rebounds.
On Sunday OPEC President Chakib Khelil told Algeria's state radio that OPEC was willing to cut production as much as was necessary to stabilize oil prices.
Yet OPEC has had a difficult time staying ahead of an unprecedented deterioration in demand as a recession spreads across the globe.
"Large stockpiles of crude throughout the (Organization for Economic Cooperation and Development), falling demand in China and negative refining margins make it difficult to see how such supply-driven initiatives can have a near-term positive effect on crude prices," said Addison Armstrong, director of market research at Tradition Energy.
The January contract, which expired Friday, fell $2.35 to settle at $33.87, the lowest level since early 2004. With U.S. stockpiles rising at the key storage facility in Cushing, Oklahoma, the price dropped as brokers and traders attempted to unload supply for whatever price they could get.
"There's so many prompt barrels sitting around that that's really sitting on the market right now, especially the near contracts," said Michael Lynch, president of Strategic Energy & Economic Research. "The cuts are really going to have an effect somewhere around February, March."
Even gas prices, which have tumbled from summer highs above $4, have not led to increased demand as millions of Americans lose jobs and cut back on spending.
The national retail average price for a gallon of regular gas fell a half penny to $1.663 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. Oil industry analyst Trilby Lundberg said that's the lowest price in nearly 5 years.
Gas is about 29 cents a gallon below what it was a month ago and more than $2.44 below where it was in July when prices peaked at $4.11 per gallon.
The nation's lowest price was $1.37 in Cheyenne, Wyo., according to a national survey released Sunday. In the continental United States, the highest price for a gallon of gasoline, on New York's Long Island, was less than half the record prices seen in July.
Natural gas prices are plummeting as well.
"The combination of strong supply growth and rapidly declining demand has caused an ugly natural gas outlook to turn much worse," Raymond James analyst J. Marshall Adkins wrote in a research note Monday.
Manufactures are slashing production, further eroding prices for natural gas that is used to power machinery.
Natural gas for January delivery fell 4 cents to settle at $5.294 per 1,000 cubic feet.
In other Nymex trading, gasoline futures slipped 8.3 cents to settle at 88.6 cents a gallon and heating oil fell 5 cents to settle at $1.3415 a gallon.
In London, February Brent crude tumbled $2.55 to settle at $41.45 a barrel on the ICE Futures exchange.
Associated Press writer Alex Kennedy in Singapore and George Jahn in Vienna, Austria.
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