NEW YORK (CNNMoney.com) -- Oil prices fell to their lowest level in five months on Friday as investors worried that an economic slowdown could chip away at demand for energy.

Light, sweet crude for October delivery settled down $1.66 to $106.23, capping off a week of declines that totaled $9.23. It was the lowest settlement price since April 3, when crude settled at $103.83 a barrel.

U.S. economy: Weakness in the U.S. labor market sparked further concerns that demand for petroleum-based products was falling.

The Labor Department announced Friday that the unemployment rate spiked to 6.1% in August, and employers trimmed jobs for the eighth straight month.

As business activity in the United States slows, the economy consumes less fuel, most of which is refined from crude oil.

Earlier in the session, the Labor Department report had sent crude as low as $105.13.

Demand: The oil market will not be able to turn its attention away from the slipping economy and the deterioration of demand that has ensued, according to James Cordier, portfolio manager of OptionSellers.com.

"What will win out is that the economy is weakening faster than expected, and that will continue to be psychologically bearish for oil," said Cordier.

In a fresh sign of slackening demand, the Energy Information Administration reported Thursday that imports of crude were 200,000 barrels a day below the same four-week period last year.

The report also showed the nation's crude stock piles shrank by 1.9 million barrels last week, a much bigger-than-expected decline, but concerns over demand overshadowed the drawdown in supply.

Oil down $40: Oil prices have fallen more than $40 from the record high of $147.27 a barrel on July 11, two months ago, as a struggling economy has cut into demand for energy.

"At some point we will get back to some level where we will see the fundamentals will matter again," said Peter Beutel, president of Cameron Hanover.

Oil marched to $147 a barrel without significant supply disruptions or geopolitical disasters to explain the jump, according to Beutel.

"Now that prices are dropping," he said, the market "is ignoring fundamental factors that are happening because the price is still too high."

"Traders are going to start targeting $100 for the price of oil soon," said Cordier.

Given that prices have fallen so drastically, the oil market will be listening closely for any announcements of a change in oil production quotas from the Organization of the Petroleum Exporting Countries meeting next Tuesday. If OPEC were to cut production, oil prices would likely increase.

Tiny storm surge: Investors were concerned that oil prices failed to rally significantly as Hurricane Gustav slammed the Gulf Coast of Louisiana on Monday, causing oil producers to shut down oil rigs and refineries.

As of late Friday, 90.5% of crude oil production and 79.8% of natural gas production in the Gulf of Mexico remained shut down, according to the Department of Energy.

"What Gustav did should have rallied the market," said Cordier.

Traders bought oil ahead of Gustav because the storm should have pushed prices of oil higher, he said. "So right now the fact that the Atlantic is full of hurricanes, I think people are going to be leery of buying oil this time."

Tropical Storm Hanna, Hurricane Ike and Tropical Storm Josephine were all brewing in the Atlantic on Friday.