Oil prices rose for the first in four days on Thursday as fund buying fuelled a late rebound. Crude prices fell earlier to less than $50 for the first time since April 18, weighed down by swelling crude supplies and signs that high prices have slowed US economic growth. US light crude settled at $51.77 a barrel, up 16 cents on the day after earlier sinking as low as $49.80. London's Brent crude settled at $52.48, up 19 cents. The US Commerce Department said economic growth in the first quarter was at the softest pace in two years, slowing to 3.1 percent as consumers and businesses curbed spending in the face of rising prices.
A slowdown in economic growth would cap US oil demand growth, which has been a key factor in record high oil prices over the past year.
Prices have already come under pressure from signs that Opec exporters have made good a pledge to increase world supplies.
US light crude is about 11 percent below the record $58.28 struck on April 4.
"Downward pressure is building into a tremendous head that needs to be released by either higher crude demand or a collapse in prices," said Deutsche Bank in a report.
"The next month will give us the answer ... and with still more high volumes of oil already on its way from Saudi Arabia, this one will play out before Saudi can defend us by cutting if we continue to head downward."
Opec producers said this week they were doing all they could to fully supply the market in a bid to cool prices that have averaged $50.85 a barrel so far this year, an increase of 17 percent since the end of 2004.
The prolonged rally has raised concerns that high commodity prices are starting to dent world economic growth by fuelling inflation and prompting a rising trend in global interest rates.
In its latest report for the week to April 22, the Energy Information Administration (EIA) said US commercial crude stocks were 324.4 million barrels, 9 percent above a year ago and the highest level since May 31, 2002.
The rise, which far exceeded analysts' forecasts of a 400,000-barrel increase, came as imports into the world's biggest oil consumer surged to 10.9 million barrels per day (bpd), the third highest daily rate on record.
Less than a month before the start of the US summer driving season, gasoline inventories were running at the top end of the range for the time of year.
Stocks of the motor fuel were 4.6 percent above last year's levels. But refinery hitches and demand growth in the US have seen the surplus above last year more than halved since early March.