US oil slides below US$50 as ECB ups growth forecast

AFP - Oil prices took a battering on Thursday, with US prices falling below US$50 a barrel for the first time this year, amid worries about increased American shale production in the wake of ramped-up capital investment.
The euro meanwhile rallied against the dollar as the European Central Bank said it no longer saw a deflation threat and noted signs on an improving eurozone economy.
Equity markets in Paris and Frankfurt rose modestly following the ECB meeting, while US stocks ended flat ahead of a closely-watched labor market report. Japan’s Nikkei snapped a four-day losing streak as exporters got a lift from the cheaper yen.
Both main oil futures contracts slumped to lows not seen since the end of last year. US benchmark West Texas Intermediate for April delivery, slid US $1 to US $49.28 a barrel, its first close under US$50 since December 7. 

The US Energy Department on Wednesday revealed a whopping eight-million barrel increase in US oil supplies over the past week - four times more than expected - owing to higher domestic production and increased stockpiling.
Jeffrey Halley, senior market analyst at Oanda trading group, said the inventories report was the “straw that broke the camel’s back,” with concerns already abounding that Russia was not pulling its weight on much-vaunted production cuts agreed between OPEC and non-OPEC countries in November.
The pullback comes during a major energy industry conference in Houston that has featured commentary about increased investment in the industry following the recovery in oil prices since an OPEC agreement struck in November.
Analysts pointed to comments from leading shale producer Harold Hamm, chief executive of Continental Resources, who was quoted in news reports as saying higher US oil output could “kill the market.”
In trading Thursday, shares in oil giant Royal Dutch Shell shed 2.0 percent and rival BP lost 1.5 percent on the London stock market. Asian energy firms had already taken a hit, with Japan’s Inpex shedding 1.2 percent, Hong Kong-listed PetroChina diving 2.2 percent and CNOOC losing 1.8 percent.
The ECB, as widely expected, kept interest rates at historically low levels and retained its massive bond-buying quantitative easing (QE) program to support for the eurozone economy intact, despite growing evidence the health of the bloc is improving.