* Lowest crude prices since Nov. 30
* OPEC downplays chance of bigger output cuts
* U.S. rig counts have been rising for 11 months
* Slowest demand in China in almost a year
(Updates throughout, updates prices, adds quote, adds context)
By Julia Simon and Devika Krishna Kumar
NEW YORK, May 4 Oil prices tumbled about 5
percent on Thursday, breaking below $50 a barrel to the lowest
since late November on signs that OPEC and other producing
countries would not take more drastic steps to reduce the
world's stubbornly persistent glut of crude.
The slide steepened after OPEC delegates downplayed the
chance that their group and other producing countries would
deepen their output cuts when they meet on May 25. They did say
current output cuts were likely to be extended.
“While the cartel is expected to extend a self-imposed
production cap by another six months, it will be a challenge to
convince several non-OPEC members to follow suit," said Abhishek
Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas
Analytics, "Persistent growth in US oil production ... will also
make extensions of the OPEC cap beyond 2017 unlikely.”
There was also a sign of slowing energy demand in China, the
world's largest second largest oil consumer, when a survey
showed growth in that country's services sector was at its
slowest in almost a year in April.
U.S. crude fell $2.33 or 4.9 percent to $45.49 per
barrel, by 1:43 p.m. (1743 GMT) Brent was down $2.33, or 4.6
percent, at $48.43.
Both contracts slid during the session to the lowest since
Nov. 30, the day OPEC agreed to cut supply. U.S. crude fell as
low as $45.39, Brent touched $48.32. Both were on track for
their biggest daily percentage declines March 8.
Both benchmarks broke below closely watched technical
levels, with U.S. crude smashing below $47.23.
"It is dangerous to try and pick a bottom in this type of
market, it is like trying to catch a falling knife," said Dean
Rogers, senior technical analyst at Kase & Company. Rogers said
charts showed the next potential stalling points were $44.20 for
WTI and $47.20 for Brent.
"Sustained closes below this levels would be extremely
bearish for the long-term."
U.S. stocks also were lower, with losers led by the energy
sector, which fell 2.24 percent to its lowest level
since August. Exxon and Chevron were among the
biggest drags on the three major indexes.
Late last year, the Organization of the Petroleum Exporting
Countries (OPEC) and other producing countries announced oil
output cuts of 1.8 million barrels per day (bpd) for the first
six months of this year.
Even so, McGillian said, "We still have a near record
overhang and signs of increasing production in areas of the
world outside the producers that agreed to the cuts."
Crude output has surged in the United States, with
increasing rig counts for the past 11 months.
Russia's Energy Minister, Alexander Novak, said in written
comments on Thursday that his country is inclined to extend its
cuts. But many in the market believe steeper cuts
are needed to reduce the glut significantly.
"At some point, the market should recognise OPEC isn't the
most important player in the market any more," said
Commerzbank's Eugen Weinberg, "That is non-OPEC, and, above all,
(Additional reporting by Amanda Cooper in London, Naveen
Thukral in Singapore; editing by David Gregorio)