MW: Oil falls below $50 on economy, slumping stocks
By Moming Zhou, MarketWatch
NEW YORK (MarketWatch) - Crude-oil futures fell for a fifth session Thursday, slumping below $50 a barrel for the first time in more than three years as global stocks tumbled and economic worries deepened.
Crude for December delivery dropped $3.71, or 6.9%, to $49.91 a barrel in early electronic trading. The December futures expire Thursday, adding more volatility to the contract.
Oil was falling as "economic worries and blowout in stock markets pressured values," said Edward Meir, an analyst at MF Global.
Crude has lost nearly 12% in five consecutive sessions. Front-month contracts haven't moved below the $50 level since May 2005.
Stocks tumbled in Asia and Europe on Thursday, following the previous session's sharp losses in the U.S.
Futures trading indicated another gloomy day on Wall Street. See Indications.
In economic news, first-time filings for unemployment benefits shot up to their highest level since July 1992 last week, government data showed Thursday. See full story.
Slowing economic growth and rising unemployment rates are cutting into oil demand. Petroleum deliveries, an indication of demand, dropped 5% from January through October -- marking their largest decline since the early 1980s, according to a monthly report from the American Petroleum Institute.
"Not only have higher prices for much of 2008 been altering consumers' behavior, but more recent economic uncertainties have increasingly been putting a damper on demand," Ron Planting, API's statistics manager, said in a statement.
The government's Energy Information Administration reported Wednesday that U.S. crude supplies rose 1.6 million barrels for the week ended Nov. 14. Motor gasoline supplies climbed to 198.6 million barrels, up 500,000 barrels on the week, the EIA said.
Also in energy trading, December reformulated gasoline slumped 6.4% to $1.0364 a gallon, while December heating oil lost 2.9% to $1.7083 per gallon.
December natural gas futures gained fell 1.2% to $6.662 per million British thermal units. The EIA will provide an update on natural-gas supplies in storage later Thursday. Analysts at IHS Global Insight expect the data to show the first supply decline of the season, namely a fall of 2 billion cubic feet for the week ended Nov. 14.
