Oil eases below USD 50 per barrel

Oil eased below 50 on Monday, on scepticism that a further OPEC cut would prop up prices.

Oil eased below 50 a barrel on Monday, on scepticism that a further OPEC supply cut would be enough to prop up prices that have been pressured by weakening global demand as the economy slows.

Venezuela said on Sunday the Organization of the Petroleum Exporting Countries should cut supply further, and Iran made similar remarks on Monday. OPEC oil ministers meet for informal talks in Cairo on Nov. 29.

8220;The demand scenario suggests we need another cut. But at the end of the day, there is a certain scepticism in the marketplace that OPEC is going to deliver at this weekend8217;s meeting,8221; Rob Laughlin, broker at MF Global, said.

US crude fell 24 cents to 49.69 by 0942 GMT, after rising as high as 51.34. The contract dipped to a 3-1/2-year low of 48.25 on Friday. Brent crude was down 22 cents at 48.97.

The US government8217;s rescue plan for Citigroup Inc boosted equities and supported some commodities, but had little impact on oil prices.

8220;This is definitely a positive development. It may create a false rally in markets but the optimism probably won8217;t last too long, since given the recent economic developments, it will need days or even weeks of positive news to boost oil prices at the fundamental level,8221; Mark Pervan, a senior strategist at Australia 038; New Zealand Bank in Melbourne, said.

Analysts said the market would be eyeing Obama8217;s announcement of his economic team later in the day, as he worked on a stimulus plan designed to lift the country out of its worst financial crisis in decades.

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Oil has plummeted nearly 100 a barrel since its record high of 147.27 in the summer as the high prices of earlier this year and the recent credit crisis hit demand in the United States, Europe and parts of Asia.

Venezuelan oil minister Rafael Ramirez urged OPEC on Sunday to agree to cut supply by 1 million barrels per day bpd at an emergency meeting in Cairo on Nov. 29 and make the cut take effect before the end of the year.

The comments were echoed by Iran8217;s OPEC governor, who said in remarks published on Monday that OPEC needs to reduce output further.

After this weekend8217;s talks in Egypt, OPEC holds a formal meeting on Dec. 17 in Algeria.