CALGARY, Alta. — The price of oil hit a two-year low, tumbling 15 per cent as fears of a global recession won out over concerns that fighting in the Middle East would threaten supplies.

This marks the biggest one-day drop since allied troops attacked Iraqi armies in the Gulf War in 1991.

The Organization of Petroleum-Exporting Countries (OPEC), will meet in Vienna tomorrow, already in a jam seeing revenue slump after pledging to keep supply moving in the wake of the Sept. 11 attacks on the U.S.

“The risk associated with the security of supply has lessened immensely and obviously removing that risk and uncertainty causes the markets to think more rationally,” says one oil and gas analyst in Calgary. “The bigger issue is the demand side.”

The price of West Texas intermediate crude futures fell US$3.96 to $22.01 a barrel, its lowest close since Oct. 29, 1999, and the biggest one-day decline since Jan. 17, 1991.

Across Canada, fleets report seeing diesel prices fall by five cents per litre. While south of the border, the demand for go juice dropped by approximately 9.2 per cent, the second straight decline.

Lower oil prices would provide a welcome offset for the United States, but are a double-edged sword for Canada according to many economists.

“Clearly the positives are that lower energy prices open the door for even lower inflation and lower interest rates … but, of course, we lose on the exploration and export side of the economy,” one energy guru says.