Oil prices tumbled below $40 for the first time since the summer of 2004 Wednesday despite an announcement from OPEC of a record production cut of 2.2 million barrels a day. Markets had already priced in a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe recession.

Light, sweet crude for January delivery tumbled 8 percent, or $3.54, to settle at $40.06 on the New York Mercantile Exchange. Benchmark crude prices fell as low as $39.88, a price last seen in July 2004.

"There's just so much oil in inventory out there right now," said Michael Lynch, president of Strategic Energy & Economic Research. "Nobody wants to buy this stuff."

Crude prices have fallen so low, producers have leased supertankers to store the oil at sea, hoping that oil will rebound.

U.S. gasoline inventories continued to rise, the government reported, providing further evidence of a major pullback by American motorists.

Demand for gasoline over the four weeks ended Dec. 12 was 2.7 percent lower than a year earlier.

OPEC had already announced cuts totaling 2 million barrels earlier this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation...

yahoo news

Maybe it's the consumers flexing their non use mussels? Go ahead and keep raising the price of crude...just more motivation for the free west to find more and better ways to side step your attempts to control through oil.

Perhaps OPEC should try to figure out ways to...eat the stuff? They just might be surprised at how industrious we can actually be...without them.

Their little honey holes are going to dry up...