Oil dips to USD 47 per barrel

US light crude for April delivery fell 30 cents to $47.05 a barrel by 1013 GMT. The contract had settled $1.10 higher at $47.35 on Monday.

London Brent crude fell 36 cents to $46.10.

“Oil prices are very much linked to equity markets and economic data at the moment,but we’re still really sideways trading in the same range we have been in for some time,” said Christopher Bellew,oil broker at Bache Commodities.

European stock markets fell on Tuesday after news US credit card defaults rose in February to their highest level in at least 20 years,undermining hopes of bank stability.

Industrial output in the United States in February plummeted to its lowest level in almost seven years,serving as a stark reminder that the 14-month long recession in the world’s largest economy was far from over.

Oil has tumbled $100 from a record high above $147 last July as the global economic meltdown has dented demand for oil worldwide.

Economic indicators due later on Tuesday include US February Producer Price Index and weekly US retail sales. The Federal Open Market Committee will also hold the first of a two-day meeting on interest rates.

In addition,traders will also be watching out for this week’s inventory data as a gauge of energy demand in the United States,with data from industry group the American Petroleum Institute (API) due at 2030 GMT giving near-term direction.

The Organization of the Petroleum Exporting Countries met on Sunday and decided not to cut output further but rather concentrate on existing cuts that total 4.2 million barrels per day since September.

The producer group’s compliance with current cuts is estimated at about 80 per cent and full adherence would take a further 800,000 barrels per day off the market.

“OPEC has really restored some its credibility and there is optimism that it will be able to reach the target. If they do,prices could trend upwards to around $50 a barrel,” said Clarence Chu,a trader at US-based Hudson Capital Energy in Singapore.