NEW YORK — Oil prices tumbled more than $8 a barrel today, dropping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion U.S. financial bailout.

A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts.

Light, sweet crude for November fell $8.24, or 7.71 percent, to $98.65 a barrel in midday trading on the New York Mercantile Exchange, after earlier dropping as low as $98.76.

The contract fell Friday $1.13 to settle at $106.89. Crude has now fallen 31 percent since surging to an all-time record of $147.27 on July 11.

Monday's sell-off was tied to anxiety over the pending U.S. rescue plan. Following a week of intense negotiations, lawmakers could hold a final vote on the emergency measure Wednesday. But investors are doubtful whether the plan will be enough to unfreeze global credit markets and restore calm to the financial system.

Global credit markets remain extremely tight, crippling companies' ability to raise capital and cover basic costs like payroll. If the economy weakens further, consumers and businesses around the globe would likely cut back on energy use even more, analysts say.

"The market is clearly questioning whether the bailout will be enough to prevent a stronger economic downturn. That obviously has potentially negative implications for oil demand growth," said Michael Wittner, global head of oil research at Societe Generale in London.

In another sign of declining U.S. demand for fuel, pump prices kept falling Monday. A gallon of regular slipped about a penny overnight to a new national average of $3.643, according to auto club AAA, the Oil Price Information Service and Wright Express. They peaked at $4.114 on July 17.

Prices could come down as U.S. Gulf Coast energy output ramps up following the passage of Hurricanes Ike and Gustav. About 57 percent of crude oil production and 53 percent of natural gas output remained shut-in after shutdowns prompted by the storms, according to the U.S. Minerals Management Service.

The rescue plan would give the administration broad power to use hundreds of billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms.

Congress insisted on a stronger hand in controlling the money than the White House had wanted. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

Oil prices were also pushed down by a stronger dollar. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell when the dollar strengthens.

While dollar gained as details of the bailout package become known, analysts said the euro was weaker also because of growing economic problems in Europe.

"It is also a question of the euro losing ground due to a continued deterioration in the euro zone," said Olivier Jakob of Petromatrix in Switzerland. "With the rate of bank failures increasing in Europe and the economy slowing more rapidly than expected, pressure will continue to mount on the (European Central Bank) to lower (interest) rates."

The 15-nation euro fell Monday to $1.4382 from $1.4614 on Friday.

In other Nymex trading, heating oil futures fell 17.20 cents to $2.8454 a gallon, while gasoline futures dropped 21.19 to $2.4532 a gallon. Natural gas futures lost 39.2 cents to $7.236 per 1,000 cubic feet.

In London, November Brent crude fell $6.02 to $97.52 a barrel on the ICE Futures exchange.