Crude oil dipped below $60 a barrel yesterday and gasoline plunged to the lowest since July 1 as Hurricane Wilma became less of a threat to oil fields in the Gulf of Mexico.

The storm should reach southern Florida during the weekend, the National Hurricane Center said. Prices surged to records after hurricanes Katrina and Rita shut U.S. offshore platforms in the region that's responsible for 30 percent of the nation's oil production. U.S. oil and gasoline stockpiles rose last week, according to an Energy Department report yesterday.

"Wilma weakened a little bit and the path has it heading in a direction that won't impact oil production," said Kyle Cooper, an analyst with Citigroup Inc. in Houston. "Also, yesterday's report showed that demand was down for one more week and inventories were up."

Crude oil for November delivery fell $1.66, or 2.7 percent, to $60.75 a barrel at 1:05 p.m. on the New York Mercantile Exchange. Futures touched $59.85, the lowest since July 29. Oil has declined 14 percent since reaching a record $70.85 a barrel on Aug. 30, the day after Katrina made landfall. Prices are up 11 percent from a year ago.

Gasoline for November delivery plunged 5.53 cents, or 3.3 percent, to $1.621 a gallon in New York. Futures touched $1.60, the lowest since July 1. Prices have dropped 14 of the past 16 sessions and are down 44 percent from a record $2.92 reached on Aug. 31. Gasoline is up 16 percent from a year ago.

"Oil at $60 and $70 was predicated on extremely strong economic growth, and these hurricanes have had a deleterious effect on the economy," said John Kilduff, vice president of risk management at Fimat USA in New York. "It now looks like the next hurricane will miss the Gulf refining region. The storm may do significant damage to Florida, though, which would further hit the economy."

The nationwide average price for regular gasoline fell 1.4 cents to $2.709 a gallon yesterday. Prices are down 11 percent from the record $3.057 a gallon on Sept. 2, according to the AAA motoring organization.

U.S. gasoline demand normally declines after the Labor Day holiday in early September. Global fuel use peaks during the Northern Hemisphere winter.

"The market's mesmerized by what appear to be low demand numbers," said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. "During the next three weeks, we will find out if there really was any demand destruction."