World oil futures slid on Friday, closing below US$50 a barrel for the first time in more than two months in New York, as markets reacted to slower US economic growth amid rising oil inventories.
New York's main contract, light sweet crude for delivery in June, fell US$2.05 to US$49.72 a barrel in closing deals. That was the lowest close since Feb. 18, when the benchmark contract closed at US$48.35.
The drop capped an 11 percent slide in crude oil futures over the past week, moving further away from the record levels hit above 58 dollars a barrel earlier this month.
In London, the price of Brent North Sea crude oil for delivery in June retreated US$1.88 to close at US$50.60 per barrel.
"I think what we're seeing is a downward correction and adaptation to the fundamentals currently in the marketplace, including high levels of supply," Jason Schenker at Wachovia Securities said.
Schenker said there had been "a great deal of downward momentum" in the market, helped in part by President George W. Bush's speech this week pledging to move toward greater US energy independence and non-petroleum energy sources.
"We also had really massive crude oil inventory build this week," he said. "Those two things have driven the price down."
Donald Luke at Fimat USA said the slide was the result of "building inventories and economic slowing" that will alter marketplace fundamentals.
Luke said many traders were now bailing out of the market with momentum moving down.
"The fact that we broke US$49.50 could mean more liquidations," he said. "We could slide to US$45 now."
Luke said markets were scaling back their forecasts for oil demand as a result of weaker economic growth in the US after Thursday's report showing a slower-than-expected 3.1 percent expansion pace.
Other economic have also been below forecasts, suggesting less demand for oil even as inventories are above average levels for the season. Official figures this week showed a buildup of 5.5 million barrels of crude oil in the US to 324.4 million barrels.
"The much bigger than forecast rise in crude stocks due to high crude imports continues to be a bearish factor," Sucden analysts said.
"With OPEC still increasing production there remains a good chance that we will see more crude stock rises again, and as soon as refinery maintenance season is over increased production of gasoline."
"These are both very bearish [factors] and could see crude prices head towards US$45," but "any more major refinery problems will support the market," they added.
Demand for gasoline, or petrol, was expected to rise with the US summer driving season starting next month -- when many Americans take to the road for holidays.
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