Crude oil prices tumbled below $50 Thursday for the first time since May 2005 as jobless claims hit a 16-year record and financial markets sank. But oil refiners, the chief buyers of crude, aren't celebrating. Gasoline prices are falling even harder and faster, so U.S. refiners are losing money on every gallon of gasoline they sell. Light sweet crude plunged 7% to $49.62 a barrel. Wholesale gasoline in the Gulf: $40.74 a barrel. Such topsy-turvy economics have happened on occasion for a few days. But the current pricing turnabout has lasted seven weeks and could persist a few more months, says Tom Kloza, chief oil analyst with the Oil Price Information Service. "It's unprecedented," Kloza says. Although refiners offset their gasoline losses with profits on diesel fuel, "if your feedstock costs more than your marquee product, you've got a problem." The average retail price of a gallon of regular gas fell 2.7 cents to $2.02 and OPIS expects it to dip below $2 Friday. Both crude oil and pump prices have plunged since July. But while crude is linked to a weak global energy market, wholesale gasoline has been hammered by a sharper drop in U.S. demand. Don't start sending oil companies your extra pennies — yet. Many independent refiners notched healthy profits in the third quarter, largely because Hurricanes Ike and Gustav knocked out capacity and raised prices, and they're making lots of money on diesel. Diesel demand has soared worldwide on heavy consumption by European motorists and Asian power plants and factories. That's pushed diesel prices nearly $1 higher than gasoline vs. an average 30-cent spread. But the global recession is dampening diesel demand just as refining capacity is growing. Next year, 2.5 million barrels a day of capacity is to be installed overseas, with the U.S. adding 250,000 barrels a day, says Credit Suisse analyst Mark Flannery. That's sure to narrow fat diesel margins of $20 a barrel. Flannery predicts a shakeout in which small, inefficient refineries — and those that can't process cheaper, heavier crudes — shut down. Francisco Blanch, head of commodities research at Merrill Lynch, says at least 10% of U.S. refiners will close. Shares of refiners such as No. 1 Valero, Tesoro and Western Refining have swooned 80% to 90% the past year. To make do, refiners are trimming gasoline production, but they can't just stop making the stuff. Every barrel of oil yields about 50% gasoline and 30% diesel and heating oil. "None of us likes selling product at a loss, but you can't turn a refinery on and off" daily, says Mark Cox, senior vice president and treasurer of Western Refining. "Markets are extremely dynamic." Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more