Oil and Gas Tumble

Time to party like it is 2004

Oil (NYSE:USO)prices fell nearly 7 percent Tuesday and gasoline prices fell to levels not seen since 2004 as a raft of lousy news about the economy, housing and the consumer state of mind suggested the U.S. is headed toward the worst recession in decades.

The government reported that the nation's gross domestic product in the United States shrank 0.5 percent in the third quarter, which was worse than expected. It was the worst showing since the economy contracted 1.4 percent in the third quarter of 2001, during the last recession.

Consumers and businesses have pulled back on energy spending, with massive layoffs and cost-cutting across almost every sector. That means less money will go toward powering everything from industrial plants to automobiles.

The Paris-based Organization for Economic Cooperation and Development said Tuesday that economic output next year would likely shrink by 0.4 percent for the 30 market democracies that make up its membership, against the 1.4 percent growth prediction for 2008. That would be the worst global recession since the early 1980s.

For those looking to invest in oil, the USO or the Oil ETF (NYSE:OIL) are ripe for the picking as a long term play.