Crude oil futures fall on growth in supplies

Crude oil prices fell modestly Monday as traders anticipated that oil inventories would continue to rise while economic growth might slow.

On the New York Mercantile Exchange, light, sweet oil futures declined 12 cents to end at 50.37 dollars per barrel. Meanwhile, on London's International Petroleum Exchange, the June Brent crude-oil futures contract fell 83 cents to close at 50.78 dollars a barrel.

US inventories of crude oil had climbed nine straight weeks as producers lifted output, seeking to keep high energy prices from damaging the global economy. Following the European Commission, the International Monetary Fund also lowered its economic growth for euro zone and Japan.

"There are a confluence of bearish factors which could drive uslower this week," said an American energy analyst. "Inventories are high and may rise further this week, OPEC's increasing production, and economic growth is slowing."

While most analysts believed the growth in inventories would weigh on prices, they gave a bullish outlook for the longer-term oil trends because. A hedge fund manager said oil might go as low as 35 dollars a barrel but the trend for oil was up. "There has been no major oil discovery anywhere in the world for over 35 years," he added.

Oil prices touched 49.66 dollars a barrel in New York, the lowest intraday level since Feb. 22. But futures remained 33 percent higher than a year ago.

Source: Xinhua