MW: Oil trades below $50 a barrel amid demand worries
By Polya Lesova, MarketWatch
NEW YORK (MarketWatch) -- Crude-oil futures traded below $50 a barrel early Tuesday, after tumbling more than 9% in the previous session, as concerns about a sharp slowdown in energy demand weighed on sentiment.
Crude oil for January delivery fell 17 cents to $49.11 a barrel in electronic trading on Globex.
Earlier, the contract hit an intraday low of $47.36 a barrel.
"Markets are increasingly concerned that the worldwide economic decline is too pronounced to be fixed any time soon and a worldwide recession will curtail energy demand," said analysts at Action Economics.
On Monday, crude fell $5.15, or 9.4%, to end at $49.28 a barrel on the New York Mercantile Exchange, coming under heavy selling pressure after OPEC left current output targets unchanged and in the face of weak economic data from around the world.
The Organization of Petroleum Exporting Countries ended a weekend meeting in Cairo without any decision on a production cut. The cartel will meet next on Dec. 17 in Oran, Algeria.
OPEC Secretary General Abdalla Salem El Badri said Monday that crude prices in the range of $70-$90 a barrel would be "very reasonable."
"Incredibly, the grim global macro backdrop is not stopping various OPEC producers from throwing out "fair" numbers for their oil, with prices between $70 to $90 being bandied about," said Edward Meir, an analyst at MF Global, in a research note.
"The cartel would do well now to lower its sights to more realistic targets, and perhaps start thinking about living with $30-$40 oil," Meir said. "This is now a distinct possibility given the unprecedented global slowdown that has yet to fully manifest itself."
On Wall Street, U.S. stock futures advanced on Tuesday, a day after the fourth-sharpest point decline in the Dow Jones Industrial Average since the key index was created. See Indications.
Also on Globex, January reformulated gasoline was flat at $1.11 a gallon and January heating oil was unchanged at $1.61 a gallon.
January natural-gas futures rose 2 cents to $6.63 per million British thermal units.
