UPDATE 5-Oil eases towards $49 as equities decline

                                
 * Oil falls 1.5 pct as global stock markets slide
                                
 * Travel stocks fall on swine flu, could hit fuel demand
                                
 * Investors eye API inventory report

                                
 (Adds Buzzard oilfield shut down, recasts, updates prices)
                                
 By Joe Brock
                                
 LONDON, April 28 (Reuters) - Oil prices fell towards $49 on
Tuesday, extending Monday's losses as declines on global stock
markets heightened expectations of a further drop in demand for
oil products.
                                
 A rising death toll from a flu outbreak has also fanned
fears of a pandemic potentially hurting the world economy.
                                
 (For more stories on the flu outbreak, click on [nFLU])
                                
 U.S. oil futures <CLc1> fell $1.01 to $49.13 a barrel by
1156 GMT, adding to Monday's losses of $1.41. London Brent crude
<LCOc1> was down 80 cents at $49.52.
                                
 "I think weakness in equities is keeping prices below $50.
Travel stocks are down, this could reduce demand," Bache
Commodities broker Christopher Bellew said.
                                
 European stocks followed Asian and U.S. markets lower on
Tuesday, knocked by growing fears about the economic impact of
the swine flu outbreak. [.EU] 
                                
 Airline stocks were among the hardest hit as flu concerns
were expected to reduce passenger numbers. This would result in
a fall in demand for fuel, adding pressure on oil prices
[ID:nSP427977].
                                
 Analysts drew comparisons between the current health scare
and the SARS epidemic in 2003, which sharply reduced fuel demand
and sent the U.S. oil price tumbling over 20 percent in a week.
                                
 Investment bank J.P. Morgan noted that during the SARS
scare, global air passenger travel fell 8.2 percent during the
second quarter of the year, and over 19 percent in Asia alone.
[ID:nN27529438] 
                                
 Some analysts have cautioned that oil prices could pull back
from current levels in the near term as demand remains weak and
fundamentals do not support higher prices.
                                
 Reflecting still-weak demand, U.S. crude stocks probably
rose 2.2 million barrels last week, a preliminary Reuters poll
showed.
                                
 The poll also forecast a 300,000 barrel decrease in gasoline
stocks and a 300,000 barrel build in distillate stocks. [EIA/S]
                                
 The weekly inventory report from the American Petroleum
Institute will be released later on Tuesday.
                                
 Oil major BP reported a 62 percent fall in first-quarter net
profit on Tuesday due to a collapse in oil and gas prices, but
heavy cost cutting helped it beat analysts' expectations.
[ID:nLS549105] 
                                
 BP said it recorded a 2 percent rise in oil and gas
production to 4.02 million barrels of oil equivalent per day,
the first time the company topped the 4 million level since the
second quarter of 2006.
                                
 Nexen Inc's <NXY.TO> North Sea Buzzard oilfield, which
supplies oil to the benchmark Forties blend, will shut down for
four weeks in the third quarter for maintenance, the company
said on Tuesday. [ID:nWLA2792] 
                                
 Oil prices have recovered from about $35 a barrel in
February to hover around $50 for most of this month, tracking a
recovery in equities markets.
                                
 U.S. crude oil is expected to average nearly $51 a barrel in
2009, a Reuters poll showed on Monday as analysts raised their
consensus forecast for the first time since July 2008.
[ID:nLN974693] 
 (Editing by Peter Blackburn)