Alaska oil prices closed below $60 today for the first time since March 2007.

Oil prices fell today a day before the government releases its weekly crude inventory report that recently has shown in stark numbers how much Americans are cutting back on energy costs.

Although oil prices typically decline in the fall, analysts expect the prices to continue falling, perhaps to as low as $50 a barrel, before they hit bottom.

U.S. crude stockpile increases have been greater than expected every week in October, which has led to rapid selloffs in the oil markets.

On West Coast open markets, North Slope oil was priced at $59.68 a barrel, down 49 cents for the day. The price has fallen rapidly since peaking at $144 a barrel in early July. This month alone prices have plunged $38 a barrel.

Demand is off about 7 percent compared with last year, said Fred Rozell, retail pricing director at Oil Price Information Service. The U.S. Department of Transportation reported the biggest monthly decline in miles driven since World War II on Friday.

"We are going to see a pretty sizable recession here," said Rozell.

Consumer pullbacks are showing up in the U.S. crude inventory reports released each Wednesday, with unexpected builds catching investors off guard.

Prices have continued to fall despite an announcement last week that OPEC would cut oil production by 1.5 million barrels a day. The Organization of Petroleum Exporting Countries, which controls about 40 percent of global crude oil production, has not ruled out another cut when it meets in December.

OPEC members warned today that low oil prices have created a crisis situation that threatens key investment in production.

At an annual oil and money conference in London, Qatar's energy minister, Abdulla bin Hamad Al Attiyah, defended OPEC's cut last week, saying it was necessary amid falling demand due to the global economic turmoil.

But many analysts say OPEC has lost its grip on oil prices, and that it is demand, not supply, that is driving crude downward.

U.S. consumers have drastically altered their behavior, and gasoline prices continue to tumble.

Over the past week, a gallon of regular gasoline fell more than 25 cents, the Department of Energy reported Monday.

Retail gasoline fell another 4 cents overnight to $2.63, according to auto club AAA, the Oil Price Information Service and Wright Express. That's roughly a dollar less than what was paid just a month ago.

The average price in Alaska, at $3.65 a gallon, remains the nation's highest, and Alaska is one of only three states where the average is above $3; Hawaii and California are the other two, AAA said.

The average price in Anchorage was $3.39 a gallon, down 7 cents for the day, AAA said.