Associated Press Oil slides below $51 in Asia on profit-taking

KUALA LUMPUR, Malaysia (AP) -- Oil prices tumbled Monday to below $51 a barrel as investors cashed in on recent gains, and in tandem with a pullback in world stock markets.

Benchmark crude for May delivery fell $1.80 to $50.60 by late afternoon in Asian electronic trading on the New York Mercantile Exchange. The contract dropped $1.96 to settle at $52.38 on Friday.

Further declines are expected as analysts say the recent rally in crude has not been supported by any real changes in market fundamentals, with supply building up while demand from industrial consumers is falling faster than expected.

"We are seeing some profit-taking because oil supply fundamentals really did not support the price rally to the mid-50s a barrel," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.

Crude prices set new year highs last week, rising steadily from US$35 in February to closing above $54 a barrel last Thursday, partly lifted by the recent rally in global stock markets.

Asian and European markets fell sharply Monday as downbeat comments from major U.S. banks and mounting woes at American auto giants undermined recent optimism about economic recovery.

Shum said there is growing skepticism about the level that prices have climbed to and foresees them sliding below $50 a barrel again.

The U.S. government last week said crude storage facilities were brimming with more oil than they've had in 16 years. Combined with strategic petroleum reserve, the nation now has 1.05 billion barrels of oil in storage -- enough to fuel roughly 44 million cars for a year. more...