Anxiety over the approaching onslaught of corporate earnings reports and doubts about global energy demand pulled oil prices below $50 a barrel Tuesday.
Benchmark crude for May delivery fell $1.47 cents to $49.58 a barrel on the New York Mercantile Exchange.
With few economic indicators expected on Tuesday, traders turned their eyes to the start of first-quarter earnings season, with aluminum giant Alcoa Inc. scheduled to report after the stock market closes.
Many investors expect dismal earnings pictures for many companies hit by the recession. As the economy slows, so does demand for petroleum products.
"This market moves on the macroeconomic news now," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Oil prices jumped from below $35 in February to above $54 last month, brushing aside key indicators that show crude oil supplies building with no real increase in demand.
But the biggest fundamental is money flow, Kloza said, and investors continue to look at the oil markets as a long-term hedge against inflation. Although investors often focus on the current oil contract, the December contract was trading around $60 before it dipped Tuesday morning, he added.
"That's really the yin and the yang of it right now, and I don't know if the yin is going to win or the yang is going to win," Kloza said.
The U.S. Energy Information Administration releases its weekly inventory report Wednesday morning, and the International Energy Agency will follow with its monthly survey and outlook on Friday.
"I think everyone is betting that it's going to be a pretty sharp downward revision in the 2009 forecast," Kloza said.
Meanwhile, retail gasoline prices climbed a tenth of a cent overnight to a national average of $2.04 for a gallon of regular unleaded, according to auto club AAA, Wright Express and Oil Price Information Service. Gas is more than 9 cents a gallon higher than a month ago, but about $1.30 a gallon cheaper than it was last year at this time.
In other Nymex trading, gasoline for May delivery fell 1.33 cents to $1.4622 a gallon. Heating oil lost 1.9 cents at $1.4001 a gallon. Natural gas for May delivery also slipped, down 8.8 cents to fetch $3.644 per 1,000 cubic feet.
In London, Brent prices fell $1.12 to $51.12 a barrel on the ICE Futures exchange.
