The national average price for gasoline tumbled below $2 a gallon Friday, its lowest point in more than three years, yet the global economic contrast between then and now could not be more stark.

On March 9, 2005, the last time gasoline cost less than $2, the Dow Jones industrial average closed at 10,805.63. The Dow on Wednesday slumped 445 points to 7,552.29, its lowest finish since March 2003.

"At this point, all we can say with any degree of confidence is that crude oil ... will not trade below zero," wrote trader and analyst Stephen Schork in a tongue-in-cheek analysis of the market's swoon.

Crude has been in free-fall, shedding two-third of its value since July and gasoline prices have followed.

The pump price for regular unleaded fell 3.1 cents overnight to $1.989 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express.

The national average price fell nearly a dime in the past week and is down almost 90 cents in the past month.

"With the price of oil seemingly in a free-fall this month, it's impossible to know exactly how low the price of gasoline will eventually go," AAA spokesman Geoff Sundstrom said Friday. "Households can, however, reasonably anticipate that lower fuel prices will be the norm throughout the rest of this year and probably into early 2009.

Light, sweet crude for January delivery fell 2 cents to $49.40 a barrel on the New York Mercantile Exchange. Earlier, in electronic trading, the price dipped to $48.25, the lowest level since May 18, 2005.

In London, January Brent crude rose 34 cents to $48.42 on the ICE Futures exchange.

Friday's bounce reflected how tightly oil prices are tied to trading in equities and left open the likelihood of further volatility in the crude sector.

Asian stock markets initially followed their U.S. counterparts down Friday, but then rallied. Japan's benchmark Nikkei index rose 2.7 percent, Hong Kong's Hang Seng index gained 2.3 percent and South Korea's key index was up 5.8 percent.

European markets also opened higher, but most were down slightly by the afternoon. London's FTSE 100 fell 0.1 percent, Germany's DAX index was off 0.3 percent and France's CAC-40 was 0.8 lower on the day.

In the United States, the Dow Jones industrial average rose 151 points, or 2 percent, in early trading, while the Nasdaq 100 index futures was up 14.21, or 1.34 percent, to 1,050.42.
Traders are still worried that a global recession will undermine energy demand.

The Dow plunged Thursday after the Labor Department said new applications for jobless benefits exceeded analyst estimates and rose to the highest level of claims since July 1992 and investors grew even more leery about the health of the nation's biggest banks.

The S&P 500 index fell 6.7 percent Thursday to an 11-year low. The S&P 500 has dropped more than 52 percent below its October 2007 record, making this the second-biggest bear market on record, exceeded only by the 83 percent drop between 1930 and 1932.

"Fifty dollars was a psychological support level," said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney. "Since we haven't traded this low for so long, it's hard to find a new support level."

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global supply, may cut production before its next official meeting on Dec. 17, Rigby said.

OPEC lowered production quotas by 1.5 million barrels a day last month.

"Their revenues are dropping so much, I think OPEC will have to call an extraordinary meeting and cut quotas to try to support the market," Rigby said. "Their last cut had zero impact on the market."

In other Nymex trading, gasoline futures rose 3.3 cents to $1.04 a gallon. Heating oil gained a penny to $1.6888 a gallon while natural gas for December delivery advanced 21.6 cents to $6.532 per 1,000 cubic feet.