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Crude oil futures plunged to a seven-week low Friday after 28 Pennsylvania counties backed away from using a new gasoline aimed at reducing air pollution.

The prospect of reduced demand for the cleaner-burning fuel triggered a 6.8 percent drop in gasoline futures and a sharp decline in heating oil, which already is burdened by rising stocks due to the unusually warm autumn weather."It's just a total panic," said analyst John O'Connell of Refco Inc., a large futures brokerage firm.

Silver futures also fell sharply as rising interest rates cast clouds over the U.S. economy. The Commodity Research Bureau's index of 21 commodities fell 1.8 points to 227.85. Cotton futures extended Thursday's gains.

Light sweet crude oil for January delivery plummeted 83 cents on the New York Mercantile Exchange to $16.99 a barrel, the lowest settlement for near-term deliveries since Oct. 14.

January wholesale unleaded gasoline tumbled 3.69 cents to 50.61 cents a gallon; January wholesale home heating oil sagged 1.73 cents to 47.02 cents a gallon; January natural gas fell 1.8 cents to $1.635 per 1,000 cubic feet.

On Thursday, Pennsylvania Gov. Robert Casey signed legislation relieving 28 counties from their voluntary agreement to require reform-u-lated gasoline beginning Jan. 1. The counties aren't among the nine metropolitan areas and 40 other communities required to offer the cleaner-burning fuel under federal or state regulations.

"What this does is eliminate any lingering concern that there might have been for any tightness in reformulated gasoline supplies," said William O'Neill, senior futures strategist for Merrill Lynch & Co.

He said traders were worried the neighboring states of New Jersey and New York might approve similar pullouts from the program.

The energy markets had been under pressure already this week from slack demand for heating fuel. The National Weather Service's forecast on Tuesday for normal to above-normal winter temperatures in most of the country had been weighing on the market.

Silver futures dropped more than 4 percent to a 12-month low on the New York Mercantile Exchange as rising interest rates fed fears of economic stifling.

"I think the market's telling we're expecting some sort of decline or slowdown in industrial demand, not so much for this year but going into next year," said Ian MacDonald, manager of precious metal trading for the New York branch of Credit Suisse, the Swiss bank.

He said some traders expected additional interest-rate increases by the Federal Reserve Board to slow down the economy.

Investment buying of precious metals continued to ebb in the absence of inflation signals. This week's broad decline in commodity prices, including Friday's steep drop in crude oil, hammered home the point, O'Neill said.

"Any inflation concerns certainly have been eliminated," he said. "Ultimately, the weakness in silver and gold goes to the ongoing dearth of investor demand."

December silver fell 21.8 cents to $4.689 a troy ounce, the lowest settlement for near-term deliveries since Dec. 2, 1993. December gold sank $3.10 to $375.50 a troy ounce.