Oil falls below $51 amid weak consumer spending

[May 01, 2009]  LONDON (AP) -- Oil prices fell below $51 a barrel Friday in light holiday-affected range trading.

Benchmark crude for June delivery was down 47 cents to $50.65 a barrel by late morning London time in electronic trading on the New York Mercantile Exchange. The contract Thursday gained 15 cents to settle at $51.12.

Trading volume was light in Asia as markets in mainland China, Hong Kong, India, Malaysia, South Korea, Thailand and Singapore were closed for holidays. In Europe, stock markets in Germany and France were closed too for public holidays.

Oil has traded near $50 a barrel for the past month as investor optimism about an eventual economic recovery were offset by high stock levels around the world, particularly in the U.S., and concerns about Chysler LLC, which on Thursday filed for bankruptcy protection.

Oil prices have tended to track stock markets, and those have risen in recent weeks, helping support oil prices.

"Be it in crude oil or in equities, markets have shown a strong capacity to discount the statistical confirmation of the economic slowdown," energy analysis firm Petromatrix said in a report to investors.

And so far, the spread of swine flu around the world has had little impact on oil prices, though it is beginning to reduce demand for jet fuel, analysts said.

"Concerns of a pandemic have so far only marginally affected oil prices," analysts at JBC Energy said.

As the new month gets underway, traders will be looking for signs from the OPEC oil cartel about a possible production cut. The Organization of Petroleum Exporting Countries, which next meets May 28, has announced output quota reductions of 4.2 million barrels a day since September. OPEC leaders have recently said the price of oil needs to be above $70 to fund high-cost production fields.

In other Nymex trading, gasoline for June delivery fell 1 cent to $1.4493 a gallon and heating oil also fell 1 cent t0 $1.3239 a gallon. Natural gas for June delivery was up 4 cents at $3.41 per 1,000 cubic feet.

In London, Brent prices fell 61 cents to $50.19 a barrel on the ICE Futures exchange.

[Associated Press; By PAN PYLAS]

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