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Oil keeps falling on new concerns

28 April 2009 08:22 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Crude oil fell for a second day on concern that the swine-flu outbreak will curtail travel and on forecasts that the U.S. economy will keep shrinking, Bloomberg reported.

Crude oil for June delivery fell 29 cents to $49.85 a barrel at 9:02 a.m. Sydney time on the New York Mercantile Exchange. Prices are up 12 percent this year. Crude futures fell $1.41 to settle at $50.14 a barrel yesterday.

Brent crude for June settlement fell $1.35, or 2.6 percent, to end yesterdayâ€™s session at $50.32 a barrel on Londonâ€™s ICE Futures Europe exchange.

U.S. stocks also retreated on concern the swine-flu outbreak will curb travel. The Standard & Poorâ€™s 500 Index declined 1.01 percent to 857.51. The Dow Jones Industrial Average dropped 0.6 percent to 8,025.

Airline stocks tumbled worldwide. U.S. carriers reported some cases of suspected flu-like symptoms to health authorities, the Air Transport Association trade group said. The U.S. Centers for Disease Control and Prevention recommended that nonessential travel to Mexico be avoided.

The global economy will shrink 1.3 percent this year compared with a January prediction of 0.5 percent growth, according to an International Monetary Fund forecast on April 22. The Washington-based lender predicted expansion of 1.9 percent next year instead of its earlier 3 percent estimate.

The dollar increased against the euro for the first time in a week on speculation the European Central Bank will lower interest rates at its meeting next month. The U.S. currency traded 1.7 percent higher at $1.3012 per euro, limiting the appeal of dollar-priced commodities like crude oil as an alternative investment.

U.S. crude-oil stockpiles rose 3.86 million barrels to 370.6 million in the week ended April 17, the highest since September 1990, an Energy Department report showed last week. Supplies probably increased 1.8 million barrels last week, according to the median of nine analyst responses in a Bloomberg News survey.