Oil plummets to below $50

London - Oil prices sank under $50 a barrel in London on Thursday, reaching the lowest levels for three and a half years, as the market was plagued by weak energy demand.

Brent North Sea crude for delivery in January tumbled to $48.54 a barrel - last reached in May 2005. The contract had closed on Wednesday at $51.72.

In New York, light sweet crude for delivery in December dived to $50.20 a barrel - the lowest level since January 2007.

Oil prices have plunged almost two-thirds since striking record highs of above $147 in July as a global economic slowdown dents world energy demand.

"The recent fall in prices largely reflects concern that OPEC is unwilling to make the oil output adjustments necessary to compensate for weakening oil demand," said Dresdner Kleinwort analyst Gareth Lewis-Davies.

On Monday, the Organisation of the Petroleum Exporting Countries (OPEC), whose members produce 40% of the world's oil, said it was ready to intervene on a regular basis to help prop up prices.

But analysts doubt whether OPEC was even fully carrying out a promise to reduce production by 1.5 million barrels of oil per day from November 1.

The latest weekly US Department of Energy (DoE) report on energy stockpiles had on Wednesday showed a sharp drop in fuel demand across the United States, the world's biggest oil consuming nation.

Crude futures should drop further to $43 or $44 a barrel before rebounding along with the global economy next year, CFC Seymour Securities said in a report published on Wednesday.

The London-based Centre for Global Energy Studies (CGES) on Tuesday forecast a contraction in global demand for the first time in 25 years amid a severe global economic slowdown.

- AFP