Oil prices dip below US$ 50 in eight weeks

19-Apr-05

As growing supplies overshadowed worries of rising global demand, oil prices dipped below US$50 a barrel. Standing at an eight-week low, US light crude traded at US$49.66, the lowest level seen since February 22, before recovering to US$49.96, still down from Friday’s close. Brent crude was down to US$50.73 a barrel. This represents a fall in prices of US crude oil of around 14%, from a fortnight ago’s all-time peak of US$58.28. US inventory levels are rising and if US stocks continue to build at the current rate, oil prices could dip to the levels of US$47- US$48 over the next couple of weeks. This slide has made it less likely that Opec will increase supplies before ministers are scheduled to meet on June 15. The Organisation of the Petroleum Exporting Countries raised formal output limits last month by 500,000 bpd to 27.5 million bpd in a bid to cool prices. Another 500,000-bpd increase was planned before the June 15 meeting if prices failed to drop below US$55.