Oil falls to $55

The crude futures contract overnight fell $3.50 to settle at $56.16, the lowest closing price since January 2007, after the U.S. Energy Department slashed its 2009 oil consumption forecast.

The department said Wednesday it expects U.S. consumption of petroleum to next year drop more severely than any time since 1980. The department's Energy Information Administration said 2009 petroleum consumption is projected to sink by 250,000 barrels per day, or 1.3 percent, more than twice that projected in its previous outlook.