Oil prices drop before US energy report

April 8, 2009

, LONDON, Apr 8 – Oil prices fell on Wednesday, in line with weaker global stock markets, ahead of a US energy inventories report which could highlight weak demand in the depressed US economy, traders said.

New York\’s main futures contract, light sweet crude for May delivery, slid 1.25 dollars to 47.90 dollars a barrel.

Brent North Sea oil for May delivery shed 95 cents to 50.27 dollars.

Later on Wednesday, the US government\’s Department of Energy (DoE) will release its weekly snapshot of American crude oil inventories for the week to April 3.

"Crude oil is down for a fourth day on speculation the DoE report will show that US supplies increased as the recession curbed fuel demand," said BetOnMarkets analyst Dave Evans.

"Oil will likely stay around the 48-dollar level until after the announcement towards the of the London trading day."

Prices sank again on Tuesday, falling below 50 dollars a barrel in New York as the market worried about tumbling stock markets and weak demand amid signs of a deepening global economic downturn.

New York crude wiped out 1.90 dollars and London Brent oil erased 1.02 dollars in trade on Tuesday.

Asian and European equity markets fell sharply again on Wednesday after overnight losses on Wall Street, where worries about the earnings season were underscored by a huge loss at US aluminium giant Alcoa.

Oil prices are currently trading more than 100 dollars underneath the record heights scaled last year.

The global economic slump has slashed worldwide energy demand, cutting crude prices from record peaks of above 147 dollars per barrel that were forged last July.

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