World oil prices fell this evening on news that US crude reserves had hit the highest level since 1990, indicating fragile demand for oil in the US economy.
London's Brent North Sea crude dropped 54 cents to $51.42, while US crude sank 40 cents to $49.01.
The US government's Department of Energy (DoE) said crude stocks surged 5.6 million barrels in the week ending April 10 to 366.7 million barrels, the highest level since September 1990. Analysts had expected a much smaller gain.
Crude inventories are now 16.5% higher than at the same stage last year. The DoE report is a key focus for the oil market because the US is the world's biggest energy consuming nation, followed by China.
Earlier, OPEC cut its estimate for world crude demand again, arguing that a 'devastating contraction' in consumption would keep prices under pressure in the months ahead.
It said 'vigilant monitoring is essential' ahead of the cartel's next meeting at the end of May at which some members are expected to push for further output cuts to help support prices.
OPEC estimated that demand would contract by 1.37 million barrels per day (bpd) or 1.6% in 2009. In its previous monthly bulletin released in March, OPEC had been pencilling in a contraction of 1.01 million bpd for 2009.
