NEW YORK (Bloomberg) — Crude oil fell below $45 a barrel to the lowest since January 2005 as the deepening recession in the US, Europe and Japan cuts fuel consumption.

Prices may dip below $25 a barrel next year if the recession spreads to China, Merrill Lynch & Co. said in a report today. US fuel consumption during the four weeks ended November 21 was down 6.2 percent from a year earlier, an Energy Department report showed yesterday.

"We've got the US, UK, Europe and Japan all in recession for the first time since World War II and the oil market is reacting," said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $5 billion energy-company bond portfolio.

Crude oil for January delivery fell $2.24, or 4.8 percent, to $44.55 a barrel at 12.26 p.m. on the New York Mercantile Exchange. Futures touched $44.45, the lowest since January 6, 2005. Oil prices have tumbled 70 percent since reaching a record $147.27 on July 11.

Gasoline for January delivery declined 4.69 cents, or 4.5 percent, to 99.46 cents a gallon in New York.

Pump prices have followed futures lower. Regular gasoline, averaged nationwide, dropped 1.4 cent to $1.789 a gallon, AAA, the largest US motorist organisation, said on its website yesterday. It's the lowest price since January 2005. The fuel has tumbled 57 percent from the record $4.114 a gallon reached on July 17.

"There is no sign where it will stop," said Tom Bentz, senior energy analyst at BNP Paribas in New York. "We are now looking at $41.15, which was the pre-Gulf-War high and after that at the $40 and $37 level."

Oil reached a then-record $41.15 in October 10, 1990, when Iraqi troops were occupying Kuwait. The milestone held until May 2004. Prices were last below $40 a barrel in July 2004.

Royal Dutch Shell Plc said that a fire broke out yesterday at its Pernis refinery in the Netherlands, the largest in Europe. The blaze started at the gasoline-making catalytic cracker at the 416,000 barrel-a-day plant, the Rotterdam fire department said.

The four-week average of petroleum products supplied in the US was 19.3 million barrels a day, down from 20.5 million barrels a day a year ago, yesterday's report showed.

"Nothing except a major shock is going to revive this market as long as risk aversion predominates," said Andrey Kryuchenkov, an analyst with VTB Group in London. "Demand numbers were down again yesterday, reflecting the economic crisis."

Qatar's oil minister said yesterday that the Organisation of Petroleum Exporting Counties will "definitely" cut output at its next meeting in Algeria on December 17.

"Opec is sure to cut quotas at the next meeting," Hodge said. "If Opec wants to have the desired impact on the market, they are going to have to show us in a physical sense, not just talk about cuts."

Opec oil ministers agreed on October 24 in Vienna that the 11 members with quotas would cut supply by 1.5 million barrels a day starting in November. Production by the 11, excluding Iraq and Indonesia, declined 725,000 barrels to 28.24 million barrels last month, according to data compiled by Bloomberg News.

"Prices won't rebound until either the financial crisis is fixed or oil-market fundamentals tighten," said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Massachusetts. "We will have to see substantial inventory reductions and Opec cuts."

US crude-oil supplies fell 456,000 barrels to 320.4 million barrels last week, the Energy Department said yesterday. It was the first decline in ten weeks.