NEW YORK - Oil prices briefly fell below $50 per barrel Thursday for the first time since May 25, 2005, after the government reported larger-than-expected jumps in crude oil and gasoline inventories.
Oil has dropped 17 percent since the end of 2006 amid weeks of mild winter weather in the Northeast United States, a key consumer of heating fuels, and growing energy stockpiles.
"There's no doubt that this is significant," said Phil Flynn of Alaron Trading Corp. "If you're a bull, the only thing you can hold your hat on is they didn't close below $50."
The price for a barrel of light, sweet crude for February delivery fell as low as $49.90 on the New York Mercantile Exchange but spent only a moment below the $50 threshold. It settled at $50.48, down $1.76 from Wednesday's settlement price.
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
Jim Ritterbusch, president of Ritterbusch & Associates, said prices could continue to fall toward $47 in the next two weeks, unless the Organization of the Petroleum Exporting Countries calls for a meeting.
"The market is still seeking a bottom," he said, "and we had another bearish element tossed at it in the form of these negative weekly statistics."
U.S. crude oil stocks rose by 6.8 million barrels to 321.5 million, according to a report by the Energy Information Administration. Analysts had been expecting an increase of just 325,000 barrels.