By Brad Foss
The Associated Press

WASHINGTON - Oil prices plummeted below $44 a barrel Wednesday, sinking for the fourth consecutive day, as supply fears receded; gasoline futures plunged and profit-taking took over.

"This is overdue, this is so overdue," said Fadel Gheit, an oil industry analyst at Oppenheimer & Co. in New York. "Oil prices have been extremely inflated."

Light crude for October delivery settled at $43.47, down $1.74. The price of Nymex-traded oil futures has fallen by 11 percent since last Thursday, when they settled at $48.70 - the highest Nymex settlement on record.

When adjusted for inflation, oil is more than $13 cheaper than it was leading up to the first Gulf War.

Ed Silliere, an analyst at Energy Merchant in New York, said the selloff in crude was the culmination of several factors, including the recent rise in Iraqi oil exports and a government report showing U.S. gasoline supplies at a higher level than last year.

The government report sent October gasoline futures tumbling 6.57 cents, or 5 percent, to $1.1946 per gallon - the lowest Nymex settlement price since June 30.

"The fact that people started taking profits triggered further profit-taking. It fed on itself," Silliere said.

Oil prices had advanced rapidly toward the $50 level in recent weeks.

Strong demand and scant excess production capacity put markets on edge as traders worried there would be inadequate supplies in the event of output disruptions in Iraq, Russia and Venezuela.

Magnifying the run-up, analysts said, was a rash of buying by institutional investors speculating that prices would go higher.

Now prices are sliding on reports that Iraq is again exporting 2 million barrels a day and that gasoline demand in the United States has tapered off from peak levels. The political turmoil feared in Venezuela, the world's fifth-largest oil exporter, abated after President Hugo Chavez survived last week's recall vote.

"The market tends to overshoot," said Peter Morici, a professor at the University of Maryland's business school.

But Morici and others said prices could stay above $40 for a while because the world has only a thin supply cushion at a time of robust demand.