Light, sweet crude for December delivery fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange.
The Commerce Department Friday reported the largest ever October plunge for retail sales and a sharp drop in business inventories.
It said retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.
The decline in sales was led by a huge drop in auto purchases, but sales of all types of products from furniture to clothing fell as consumers retrenched.
That likely means fewer vehicle miles driven, both because of job losses and less trips to the shopping mall and less money spent on vacations. Businesses are slowing down as consumption drags.
The Commerce Department reported business inventories dropped by 0.2 percent in September. It was the first decline since March 2007 and the biggest drop in more than three years, since inventories fell by 0.3 percent in July 2005.
The national average price for regular gasoline fell overnight, down 2.6 cents to $2.152 a gallon, according to according to auto club AAA, the Oil Price Information Service and Wright Express.
That is nearly $1 a gallon below what it was a month ago and nearly $2 below where it was in July when prices peaked at $4.11 per gallon.
"We're on a trajectory that cannot be turned around on the short term," Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said Friday of gasoline prices.
In his blog Thursday, Kloza estimated that the daily U.S.
gasoline bill for the rest of November will be about $750 million per day less that what it was in early July when the cost was $1.55 billion per day.
He said some retailers have noted the actual purchase amounts of gasoline are smaller than what they were over the summer as motorists realize they will pay less for gas the next time they fill up.
He put the odds of oil dropping below $50 per barrel at about 50 percent even as the Organization of Petroleum Exporting Countries repeatedly removes oil from the market to keep pace with deteriorating demand.
An OPEC official said the 13-member states would meet in Cairo Nov. 29 on the sidelines of a previously planned meeting for Arab members of the group.
The official asked not to be named because the Vienna-based organization is not issuing a formal statement.
OPEC held an emergency meeting only three weeks ago and slashed production by 1.5 million barrels a day. Crude has tumbled 8 percent since then.
Analysts say OPEC's rhetoric rarely matches what it does.
Nevertheless, as the economy turns around, consumption of fuel will increase and send oil prices higher.
"In the long run global growth will be restored at some point," Kloza said Friday. "It will do their dirty work for them."
George Littell of Groppe, Long & Littell said OPEC's recent cuts will not be felt for a few more weeks. He noted that prices did not begin to fall this summer until Saudi Arabia ratcheted up production in July.
Littell said oil prices likely will start to rally in a few weeks once OPEC cuts start to hit and cold weather sets in across the country.
Jim Ritterbusch, president of energy consultants Ritterbusch and Associates, said OPEC needs to do something. If OPEC were to maintain production levels, oil consuming countries would be happy, but it probably would drag prices down another $5 or $10 a barrel, he said.
Oil prices have fallen about 60 percent during the last four months after reaching $147.27 in July.
OPEC, which produces about 40 percent of world supplies, has said it may cut production by the end of this month if prices continue to fall.
Before the 1.5 million barrel cut, OPEC said it was taking 520,000 barrels out of daily production. That too was brushed off by the market.
Meanwhile, the government said Friday that natural gas stockpile levels in the U.S. rose more than expected last week, but are 2 percent below the year-ago average.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 62 billion cubic feet to about 3.47 trillion cubic feet for the week ended Nov. 7.
Analysts had expected a boost of between 41 billion to 46 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The news sent natural gas for December delivery down less than a penny to settle at $6.312 per 1,000 cubic feet on the New York Mercantile Exchange on Friday.
In other Nymex trading, heating oil futures fell 4 cents to $1.8351 a gallon, while gasoline prices dropped 6 cents to $1.24 a gallon.