Crude oil prices fell by $3.24 on January 12, declining to $37.59 per barrel. This, marked against the peak of $147.27 in July of 2008, is a 75% decline in less than six months. The declines, spurred by slowed economies world wide and lessened demand, have caused major panic in oil producing countries to continue, amid fears of loss of long term revenues. At the pump, the average price for a gallon of regular unleaded gasoline was $1.79 on Monday, down from Sunday’s $1.792 a gallon, according to the American Automobile Association.

Heating oil prices also dropped 0.0153 cents to $1.4724 per gallon and natural gas prices fell 0.026 cents to $5.542 per million British thermal units.

Slight rebound after OPEC’s public comments

On Wednesday, crude oil rose for a second day after Organization of Petroleum Exporting Countries (OPEC) heads stated that they will be seeking further production cuts in an effort to bolster market prices. Saudi Arabian Oil Minister Ali al-Naimi said February output will be “lower than the target” set at the group’s December 17 meeting.

Saudi Arabia is currently producing 8 million barrels a day, about level with its 8.051 million barrel-a-day allocation, al-Naimi stated at a conference in New Delhi yesterday.

Various OPEC countries weighed-in on the matter as Qatari Oil Minister Abdullah bin Hamad al-Attiyah, also in New Delhi, said today that the right price for oil is $70 a barrel. The $70 per barrel target is what most oil producing countries previously described as a quantity that would sustain modest profitability in their respective countries.

Last month OPEC agreed to cut supply by 9% to 24.845 million barrels a day starting on January 1.

“We’re willing to cut 2 million more, 4 million more barrels to preserve the price of oil,” Venezuelan President Hugo Chavez said in a speech to the National Assembly in Caracas yesterday.

The Energy Department reduced its forecast for crude prices this year by 15% to $43.25 a barrel as the economic slump in the U.S., Europe, and Japan cuts global fuel demand. Global demand will shrink by 810,000 barrels a day in 2009 from last year to 85.1 million barrels a day, it reported.

Some industry analysts expect the global recession leading to the continued low price of oil to reach into the last quarter of 2009 and possibly into 2010.