NEW YORK – Crude oil prices steadied Monday just above $50 a barrel as speculative buying slowed a steep two-week sell-off triggered by swelling stockpiles in the United States, the world's biggest energy consumer.
U.S. light crude futures (search) settled down 12 cents to $50.37 a barrel after falling as low as $49.66 a barrel on the New York Mercantile Exchange (search), the lowest since Feb. 22. Brent crude in London fell 83 cents to $50.78.
Dealers said many speculators saw $50 as a buying opportunity, keeping prices buoyed.
U.S. crude oil prices are down from an all-time peak of $58.28 a barrel hit two weeks ago, driven by the highest U.S. crude stockpiles since the summer of 2002 and signs of slower Chinese demand growth.
OPEC producers said the decline in prices would probably mean the postponement of any further formal production increase at least until the group's next meeting in mid-June. But OPEC (search) President Sheikh Ahmad al-Fahd al-Sabah of Kuwait said actual cartel output could rise next month in any case.
"I think prices have become almost at a fair price. If there will be an increase it will be in May because the market will need this kind of increase because the demand will grow in the third quarter," Sheikh Ahmad said.
OPEC kingpin Saudi Arabia, has already told customers to expect more oil in May.
Qatar's energy minister went further, saying OPEC should be careful not to let stockpiles build too fast.
"We see inventories building up higher than in 2002. It shows we have to be careful that inventories are not in a position to threaten oil stability," Abdullah al-Attiyah told Reuters in an interview.
U.S. government data released Friday showed U.S. crude oil speculators cutting back their net long positions from a record high in mid-April -- a sign that bullish sentiment is beggining to ease.
The recent strengthening of the U.S. dollar has encouraged funds to take profits on commodities globally. Copper slid to a two-month low last week, while zinc and aluminium also fell heavily.
Despite the latest retreat, U.S. oil prices are still 15 percent higher than at the end of 2004, with many institutional investors still keen to bet that demand in the United States and China, the world's biggest consumers, will keep producers and refiners working at full throttle.
Finance ministers from the Group of Seven industrialized nations meeting in Washington at the weekend said record oil prices were a "headwind" facing the global economy but said the outlook for economic growth was healthy.
"The global expansion has remained robust, and the outlook continues to point to solid growth for 2005," the G7 said in a statement issued after the meeting.