Oil hits eight-week low

Oil prices extended a losing streak on Monday, falling briefly to an eight-week low under $50, as growing supplies outweighed worries of rising global demand. US light crude traded as low as $49.66 a barrel, the lowest since February 22, before recovering to $50.20, down 29 cents from Friday's close. Brent crude was down 51 cents to $51.10 a barrel, after losing 59 cents on Friday. US crude oil prices have fallen around 14 percent from an all-time peak of $58.28 hit two weeks ago, driven by swelling crude stocks and signs of a sharper-than-expected decline in China's oil demand growth.
"People who bought in at the highs are probably getting a bit nervous now," said David Thurtell, Sydney-based commodities strategist with the Commonwealth Bank of Australia.
"US stocks are building pretty comfortably. I guess you wouldn't rule out prices getting to $47 or $48 over the next couple of weeks."
Data on Friday from the Commodity Futures Trading Commission showed non-commercial crude oil speculators cutting their net long positions by a little over 29,000 to 59,650 in the week to April 12. Big money fund speculators had held a record 88,712 net longs in the previous week in a bet that prices would go higher.
Societe Generale said in a research note that the recent strengthening of the US dollar had encouraged funds to take profits on commodities globally. Copper slid to a two-month low last week, while zinc and aluminium also fell heavily.
Oil's slide has made it less likely that Opec producers, which control half of global exports, would increase supplies before ministers are due to meet in June.
The Organisation of the Petroleum Exporting Countries raised formal output limits last month by 500,000 barrels per day (bpd) to 27.5 million bpd in a bid to cool prices and left room for another 500,000-bpd increase before the June 15 talks if prices failed to drop below $55.
Kuwait's state news agency KUNA on Saturday quoted Opec spokesman Abdel-Rahman al-Khreiji as saying he expected "the increase will be postponed for the present time in the event that oil prices continue to fall".
Opec member Algeria told state radio on Saturday that Opec should consider increasing output from June to cope with a seasonal rise in demand at the end of the year during the northern hemisphere winter.
Saudi Arabia, Opec's biggest exporter, said last week it would boost its May crude supplies by 10 percent or more - effectively putting as much as 500,000 bpd of new oil on the market - to help build stocks before the expected end-year demand surge.
Despite the latest retreat, oil prices are still 15 percent higher than at the end of 2004 on expectations that demand in the United States and China, the world's biggest consumers, will keep producers and refiners working at full throttle. Finance ministers from the Group of Seven industrialised nations meeting in Washington at the weekend said record oil prices were a "headwind" facing the global economy but said the outlook for economic growth was healthy. "The global expansion has remained robust, and the outlook continues to point to solid growth for 2005," the G7 said in a statement issued after the meeting.