'Lower for longer:' Oil prices crater to 2003 levels

Oil prices fell to levels they haven't seen since you were rocking out to Norah Jones and Nelly in 2003. Yes, it's been that long.

The price of crude oil Monday plummeted another 5% to $31.41 a barrel Monday based on WTI Crude Oil. That's the commodity's lowest closing price since hitting $30.73 a barrel on Dec. 5, 2003, according to Bloomberg data. Talk about a brutal implosion that keeps raging. Oil prices are down 16%, just this year. That's coming off a brutal 2015 when oil prices dropped 30%.

Traders and investors who dreaded oil prices could go "lower for longer" have seen their fears materialize, says Tom Kloza, global head of energy analysis at Oil Price Information Service. "It's a meltdown. It's beyond hyperbole," he says.

Oil prices have been falling in a historical collapse. Oil prices are now down a staggering 79% from the 20-year high of $145.29 notched on July 3, 2008, according to Bloomberg data.

That's been translating into massive savings for many consumers at the pump. The national average gas price is $1.95 a gallon in the U.S., Kloza says, with consumers in many parts of the country easily able to fill up for $1.75 to $1.80 a gallon if they hunt around just a little. Prices could fall further, he says, to $1.72 for a national average.

Oil prices are getting decimated as the massive oversupply of crude overwhelms normal demand levels. The world might be pumping out up to 1.5 million barrels of day in supply beyond demand, Kloza says. Demand for oil remains steady, but financial markets are worried that an economic slowdown could crimp the demand for oil. If that happens, the price of oil could fall into the $20-a-barrel level.

Kloza thinks most of the vicious selling is over and figures prices will find a bottom around current levels. His expected range for oil prices was $32 a barrel to $55 -- indicating things have already weakened more than he expected.

"I think we're in the last innings of the (oil price) decline, but those could be some ugly innings," Kloza says. "All bets are off on where prices are going."

Follow Matt Krantz on Twitter @mattkrantz