Crude oil fell from a three-month high on speculation that prices have risen too high, too fast as the worldwide recession continues to sap fuel demand. Crude fell, after climbing above $50 a barrel yesterday, amid doubts that plans by the U.S. government will be enough to revive the economy as U.S. inventories remain at a two-year high. Oil also fell as the dollar rebounded against the euro, reducing the appeal of commodities to investors. “There isn’t justification for crude prices to stay above $50,” said Mike Wittner, head of oil research at Societe Generale SA in London. “We still have a weak economy; we still have weak demand.” Crude oil for May delivery, the most actively traded contract, fell as much as $1.02, or 2 percent, to $51.02 a barrel on the New York Mercantile Exchange. It traded at $51.45 at 11:51 a.m. in London. The April contract on Nymex, which expires today, traded at $50.92 a barrel, down 1.3 percent. Prices are still poised to gain for a fifth consecutive week, the longest winning streak in 11 months. Oil climbed above $50 a barrel yesterday to the highest in three months on the Federal Reserve’s plan to end the recession by spending $1 trillion buying back debt. A weakening dollar also boosted demand for oil as a hedge against inflation. ‘Daunting Macro Backdrop’ “Commodities are getting slightly ahead of themselves given the daunting macro backdrop,” Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report today. “We suspect that at some point the dollar on its own will not be enough of a reason to sustain the rallies.” Brent crude oil for May settlement was at $50.26 a barrel, down 41 cents, at 11:53 a.m. London time. Yesterday the contract jumped 6.3 percent to $50.67 on London’s ICE Futures Europe exchange, the highest close since Nov. 28. The trade-weighted Dollar Index, which tracks the currency’s performance against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona, slid yesterday for an eighth day, the longest stretch in a year. The dollar has recovered some of its losses today. It was up 0.6 percent at $1.3581 per euro from $1.3665 yesterday at 11:10 a.m. in London. Oil may decline next week on speculation that U.S. oil and fuel inventories will increase because the recession has curbed demand and as a “fragile” stock market rally loses steam. Seventeen of 33 analysts surveyed by Bloomberg News, or 52 percent, said futures will fall through March 27. Twelve respondents, or 36 percent, forecast oil prices will increase and four said that there will be little change.

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