Oil drops below $100

Oil prices tumbled Monday as concerns about global economic weakness outweighed signs that lawmakers are close to passing a $700 billion bailout of the U.S. financial system.

Light, sweet crude for November delivery was down $8.19 to $98.70 a barrel in morning trade on the New York Mercantile Exchange.

The price of oil spiked last week, marking its largest one-day gain ever, as traders scrambled to buy futures before the expiration of the October contract.

But that rally was "technical in nature" and did not result in any "bullish follow through," said Stephen Schork, oil industry analyst and publisher of the Schork Report.

The market is "focusing on the real demand destruction in place right now," Schork said.

Economic weakness worldwide, combined with a seasonal downturn in demand for petroleum products, could drive the price of oil to $75 a barrel, according to Schork.

Bailout. Monday's decline in the price of oil comes as Congress appears set to vote on a massive intervention in the financial system.

The controversial plan would use up to $700 billion in tax dollars to buy tainted mortgage-backed securities from Wall Street companies.

The plan seeks to make banks less reluctant to lend by removing the threat of future losses on the bad mortgage-related assets. That, according to proponents of the plan, will help get the economy back on solid ground.

Dollar. Oil prices were also pressured Monday by a stronger dollar.

The 15-nation euro fell to buy $1.4402 in morning trade from $1.4618 late Friday. The U.S. currency also gained ground against the British pound and held steady against the Japanese yen.

The dollar's strength comes as the crisis on Wall Street appears to be spreading to the European financial system.

In Germany, government regulators and several banks tossed a multibillion euro line of credit to Hypo Real Estate Holding AG in move aimed at shielding the country's second largest commercial property lender from going under.

Over the weekend, Dutch-Belgian banking giant Fortis NV was partially nationalized with a $16.4 billion rescue from the governments of Belgium, the Netherlands and Luxembourg, after investor confidence in the bank evaporated last week.

Gasoline. The national average price for a gallon of gas fell one cent overnight.

Regular gasoline fell to $3.643 a gallon Monday from $3.655 the day before, according to the American Automobile Association's daily survey.

Diesel prices also came down. The national average price for a gallon of diesel fell overnight to $4.084 from $4.095.