...AND CHEAPER...:

Oil Slides Below $50 Mark: Rising U.S. supplies and worries about the global economy cool the market. Many analysts expect gas prices to fall. (John O'Dell, April 30, 2005, LA Times)

Oil prices plunged below the $50-a-barrel mark Friday for the first time in more than two months, triggering hopes for cheaper gasoline and diesel prices as the summer travel season approaches.

Light crude for June delivery dropped $2.05 to $49.72 a barrel on the New York Mercantile Exchange. The U.S. benchmark grade, which last settled below $50 on Feb. 18, fell $5.67 a barrel, or about 10%, during the last week amid rising U.S. supplies and fears of a softening world economy that could suppress global demand in coming months.

The $50 mark is a psychological barrier that, once broken, makes its easier for traders to think in terms of lower prices, said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.

"If there's no contrary news, this thundering herd may stampede to the mid-$40s in relatively short order," he said.

Mid-$40s isn't a floor.

Posted by Orrin Judd at April 30, 2005 9:46 AM