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Oil prices slide on world economy worries

Oil prices fell heavily Monday in line with stock markets on renewed concerns for the global economy, traders said.

New York's main futures contract, light sweet crude for delivery in May, dropped 1.73 dollars to 50.65 dollars per barrel.

Brent North Sea crude for May shed 1.50 dollars to 50.48 dollars a barrel.

"The market is probably a little concerned about the short-term performance of the equity markets," said Mark Pervan, senior commodities analyst of ANZ bank.

European and Asian stock markets dived on Monday as fresh woes for the global auto sector and extremely weak economic data triggered a rush to dump shares.

Tokyo closed down 4.53 percent as bad industrial and auto production data fed the gloomy economic outlook and traders rushed to lock in profits made last week, they added. European indices fell between two and about three percent in morning trade.

Meanwhile oil prices at about 50 dollars a barrel will not support huge investments needed in the sector to meet demand, the secretary-general of the International Energy Forum said on Monday.

"Current prices will not support the huge levels of investment needed to meet future oil demand," Noe van Hulst told the opening of a two-day forum on cooperation between national and international oil companies in Kuwait.

"Around 12 trillion dollars of investments are needed in the oil and gas sector by 2030, or nearly 500 billion dollars per annum, to maintain market balance," Hulst of the Riyadh-based IEF said.

He warned that a delay in investments and projects, which is already taking place, will affect future energy supplies and he called for the maintaining of investment plans, as much as possible, to avoid a "boom-bust cycle."

Oil prices have tumbled from record heights of above 147 dollars a barrel last July as a vicious global economic downturn slammed demand for energy.

However Qatar's Energy Minister Abdullah al-Attiya said on Monday that the latest price of oil is "reasonable" given the ongoing global economic downturn.

"Fifty (dollars a barrel) is a reasonable price for 2009, considering the global economic crisis," Attiya told reporters on the sidelines of the two-day energy forum in Kuwait City.

"The world economy is in depression and has not reached the bottom. I am still waiting to see the worst," the minister said.