Jakarta, Financeroll.com - Oil fell below $50 a barrel, extending yesterday’s 4.2 percent decline, on forecasts U.S. crude inventories gained last week because of plummeting fuel demand during the global recession. An Energy Department report tomorrow may show oil supplies rose 2 million barrels last week. Stockpiles are at the highest since July 1993 as refiners shut units for maintenance. Prices plunged yesterday after the International Energy Agency cut its 2009 demand prediction.

The story for demand remains very weak since there is no evidence of a turnaround in the economic situation in the U.S.

Crude oil for May delivery fell as much as 85 cents, or 1.7 percent, to $49.20 a barrel in electronic trading on the New York Mercantile Exchange.

Oil demand will shrink 2.8 percent this year as worldwide gross domestic product declines by 1.4 percent, according to the International Energy Agency. Consumption will decline 2.4 million barrels a day this year, about the same amount that Iraq produces, to 83.4 million barrels a day.

U.S. crude-oil supplies increased 1.65 million barrels to 361.1 million in the week ended April 3, the Energy Department said April 8.
Gasoline stockpiles probably dropped 750,000 barrels from 217.4 million a week earlier, according to the survey. Distillate fuels, a category that includes heating oil and diesel, probably fell 1 million barrels from 140.8 million.

Brent crude oil for May settlement fell as much as 63 cents, or 1.2 percent, to $51.51 a barrel on London’s ICE Futures Europe exchange.

Iran’s OPEC governor said the producer group may cut oil output again when ministers next gather if demand falls further. The Organization of Petroleum Exporting Countries is scheduled to hold its next meeting in Vienna on May 28. “If demand continues to decrease until the next meeting of the group, a further output cut will be possible,” Mohammad Ali Khatibi was quoted as saying by the Tehran-based newspaper.

OPEC reduced daily output targets by 4.2 million barrels since September to prevent a glut and bolster prices. As OPEC nations make their biggest oil production cuts on record, Brazil, Russia and the U.S. are pumping more, sending crude back below $50 a barrel as demand slows.