Oil slipped under $50 a barrel on Tuesday on forecasts for softer 2009 global petroleum demand and for a weekly build in U.S. crude supplies.
The U.S. Energy Information Administration (EIA) lowered its 2009 world oil demand forecast by 180,000 barrels per day. to just over 84 million bpd.
In addition, the government reported U.S. retail sales unexpectedly fell 1.1 percent in March, as motor vehicle purchases declined, indicating subdued consumer spending amid rising unemployment.
The latest EIA estimate of global and U.S. oil demand is not yet positive and denote that weak demand is still out there, said Kyle Cooper, director of research at IAF Advisors in Houston.
Combined with the U.S. data showing an unexpected fall in retail sales in March, the latest statistics have taken a little luster off crude oil futures.
U.S. crude fell 64 cents, or nearly 1.3 percent, to settle at $49.41 a barrel. ICE Brent crude fell 18 cents to $51.96.
Oil fell more than 4 percent on Monday after the International Energy Agency, adviser to 28 industrialized countries on energy policy, cut its world oil demand forecast for 2009. That outlook called for even weaker global demand than Tuesday's U.S. forecast.
OPEC, the source of more than a third of the world's oil, publishes its monthly view on Wednesday.
Still, analysts point to some positive indications for the economic outlook and demand for commodities. Industrial output growth in world No. 2 oil consumer China picked up to 8.3 percent in March.
We have a number of signs that economic activity is looking slightly stronger, said Francisco Blanch, head of global commodities research at Banc of America Securities-Merrill Lynch. Probably the worst is behind us.
In addition to the forecasts for global supply and demand, traders will also focus on the latest snapshot of supply in top consumer the United States.
U.S. crude oil supplies rose for the sixth consecutive time last week as imports rebounded, and that could have lifted inventories to the highest in almost 19 years, an expanded Reuters poll of analysts showed on Monday.
The poll of 14 analysts showed an average forecast for a 1.9 million-barrel increase in crude inventories.
Industry group the American Petroleum Institute issues its inventory report later on Tuesday. The EIA releases its own data on Wednesday.
Oil has recovered to a range of $47 to $54 for the past four weeks from a low of $32.40 in December. It is still down by almost $100 from a record high above $147 last July.
(Reporting by Alex Lawler and Barbara Lewis in London and Gene Ramos and Robert Gibbons in New York; Editing by Marguerita Choy)