Crude oil prices plunged toward $50 a barrel on Monday morning as weakness in global stocks raised further demand concerns. A weaker dollar also lowered the hedge appeal of commodities.
Light sweet crude for May delivery dropped to $50.11, down $2.27 for the day. Prices touched as low as $49.95 in the early going.
Stock markets have declined after the U.S. government stated that bankruptcy might be the best solution for troubled automakers in the country, including General Motors, whose CEO Rick Wagoner has been forced to quit the job.
Meanwhile, the dollar rose to new multi-day highs against the European majors as concerns about the global economy prompted investors to seek the safety of the world's most liquid currency. The dollar climbed near 2-week high versus the euro and also reached as 12-day best versus the sterling.
Traders also looked forward to the release of the Energy Information Administration's inventory data on Wednesday. Last week's report showed crude oil inventories increased 3.3 million barrels in the week ended March 20. Analysts were expecting a rise of about 1.2 million barrels. The build is the 22nd in 26 weeks.
Light sweet crude fell $1.96 on Friday. Prices touched as low as $51.64 after challenging $55 in recent days. In its first week as the front month contract, May crude closed up 31 cents.
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