Just six months ago, the question was how high crude could reach. Now, it’s how low can it go?

Oil prices have fallen more than $100 a barrel amid a global recession that has sapped consumption. And economists say the sting will likely last longer than any other recession since World War II.

Now, $40 crude — seemingly unthinkable during its dizzying race into triple digits in the first half of this year — is within reach.

Today, light, sweet crude for January delivery settled at $40.81 a barrel on the New York Mercantile Exchange, down by nearly $3 per barrel. Prices fell as low at $40.50, levels last seen in December 2004.

IHS Global Insight chief economist Nigel Gault said Thursday inflation has vanished alongside oil’s plunge. He said crude could hit a trough of $39 a barrel in the second quarter of next year, increasing the threat of deflation — falling prices in tandem with reduced output and higher unemployment.

Tom Kloza, chief oil analyst with the Oil Price Information Service in Wall, N.J., called $40 the new $10, meaning $40 is the bottom now as $10 was the bottom in the last two oil crashes in the mid-1980s and the late 1990s.

But Merrill Lynch’s global economic team said in a report Thursday prices could temporarily fall as low as $25 a barrel if the recession spreads to China and the Organization of the Petroleum Exporting Countries doesn’t cut enough production at its Dec. 17 meeting.

MADRID, Dec 8 (Reuters) - The European Central Bank doesn’t exclude reducing the price of money rates again in the next few months, Executive Board member Jose Manuel Gonzalez-Paramo was quoted as saying. Gonzalez-Paramo said at a conference in Malaga which was reported by the Spanish newspaper La Opinion de Malaga, over the weekend, that the inflation outlook was improving.