MW: Oil falls on worries over economy, General Motors
Crude-oil futures fell below $51 a barrel Monday, as indications that the Group of 20 nations are unlikely to call for further economic stimulus measures this week rekindled concerns that a slow recovery in global growth will continue to weigh on energy demand.
Worries over a possible bankruptcy for troubled automakers General Motors and Chrysler also put downward pressure on energy prices.
Crude for May delivery dropped $1.85, or 4%, to $50.52 a barrel in early North American electronic trading.
Leaders of the world's 20 largest industrialized and developing economies will meet in London. Leaks of drafts of the meeting's final communiqués and remarks by politicians, including U.S. President Barack Obama, indicated that a push by the United States and Britain for a further round of coordinated, global economic stimulus was unlikely to bear fruit. Read more.
Instead, the meeting is expected to produce strong language pledging to avoid protectionism, restore growth and reform financial markets and institutions.
Worries over a slow recovery in the global economy tend to weigh on energy prices.
Oil futures fell nearly 4% on Friday, but finished last week up 0.6%.
"Crude oil prices started giving up recent gains Friday and continued lower this morning," said Brenda Sullivan, an analyst at Sucden Financial Research.
"These moves coincided with equity moves lower as well as talk that U.S. automakers might be pushed to accept bankruptcy procedures."
U.S. stock futures fell on Monday, as the White House said bankruptcy was a possibility for GM and Chrysler while hopes for a new round of global stimulus spending appear thwarted.
Worries for General Motors and Chrysler escalated after the White House said a structured bankruptcy plan for the two automakers could give them their "best chance at success." Also, GM CEO Rick Wagoner was ousted.
Also on Globex Monday, April reformulated gasoline fell 3 cents to $1.46 a gallon and April heating oil dropped 4 cents to $1.40 a gallon.
April natural gas futures fell 1 cent to $3.94 per million British thermal units.
