So oil jumps from 85 to 110 over the last 2 months and today it drops 4 bucks and its on "economy worries"... Werent there economy worries for the last 12-18 months while oil soared over 50%.....the excuses they use for oil selling off just makes me laugh... AP Oil Plummets on Economy Worries Monday March 17, 4:18 pm ET By John Wilen, AP Business Writer Oil Prices Plunge on Concerns That the Crisis Facing Bear Stearns Will Widen NEW YORK (AP) -- Oil prices plunged Monday, pulling back at least temporarily from record levels as investors feared that the financial crisis that forced the sale of Bear Stearns Cos. is a sign of deep economic trouble. Crude's plunge came even as diesel prices rose to a new record above $4 a gallon, and gas prices remained high. Diesel, used to transport the vast majority of the nation's goods, rose 1.3 cents to a national average of $4.002 a gallon Monday, according to AAA and the Oil Price Information Service. The national average price of a gallon of gas, meanwhile, dipped slightly to $3.283 a gallon, but remains 73 cents higher than a year ago. Oil's steep decline -- falling $4.53 to settle at $105.68 a barrel on the New York Mercantile Exchange -- came hours after futures reached a new trading high of $111.80 on the Federal Reserve's move Sunday to lower a key interest rate by a quarter point. In the past several months, Fed rate cuts have fed rallies in oil prices. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the dollar is down. Interest rate cuts, and even the prospect of future cuts, tend to weaken the dollar further. But the mass selling Monday -- despite the Fed's Sunday rate cut, the prospect of another cut at the Fed's regular Tuesday meeting, and the fact that the dollar dropped to new lows against the euro on Monday -- could be a sign that the oil market's momentum has turned negative, analysts say. "People are saying, well, things are a lot worse than we thought," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. The Bear Stearns sale contributed to that fear. JPMorgan on Sunday agreed to bail out Bear Stearns by buying the investment bank in a Fed-backed deal worth $236.2 million. While Bear Stearns shares closed at $30 a share on Friday, JP Morgan will pay only $2 per share. The deal, while averting a bankruptcy filing for Bear Stearns, showed the severity of the fallout from the country's credit problems. During much of oil's recent rally, the market shrugged off signs of economic weakness as investors bet that the Fed's rate cuts would continue, further weakening the dollar and drawing fresh investing into oil futures. On Monday, that changed. "Seemingly, recession fears overrode the effect of the slumping dollar," said Eric Wittenauer, an analyst at A.G. Edwards & Sons Inc., in a research note. Investors received more bad economic news when the Fed released data Monday that showed the nation's industrial output dropped by 0.5 percent in February. Analysts had expected an increase of 0.1 percent. Since oil moved above $100 a barrel last month, a growing number of analysts have argued that oil prices are in a bubble. Several forecasters have lowered demand growth predictions for this year, while supplies have grown. "The fundamentals of the oil market didn't support the prices we had to begin with," said Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC in Stamford, Conn. A retreat in the oil market could spell relief for consumers. Higher energy prices have by themselves forced consumers to cut back discretionary spending, a trend that has hurt retail sales. Higher costs for fuel have also driven the price of everything else higher as well. Still, gas prices are expected to rise as demand picks up in the spring and summer. In its most recent forecast, the Energy Department said it expects gas prices to rise to about $3.50 a gallon, while many analysts say prices could peak between $3.75 and $4. Those estimates could fall, if oil remains on the retreat. Diesel's surge is hitting the nation's truckers particularly hard, said Bill Graves, chief executive of the American Trucking Association. "There is little to suggest that fuel prices will decline any time soon," Graves said in a statement. "Escalating fuel prices are hurting (truckers') businesses and affecting their livelihood." Other energy futures also fell steeply Monday. April heating oil futures dropped 7.81 cents to settle at $3.0684 a gallon while April gasoline futures plunged 18.52 cents to settle at $2.5042 a gallon. April natural gas futures dropped 76.8 cents to settle at $9.10 per 1,000 cubic feet. In London, May Brent crude futures fell $4.45 to settle at $101.75 a barrel on the ICE Futures exchange.