* European, Asian stock markets higher
* Japan plans extra $100 bln economic stimulus
* Gold slips towards 2.5-month low as risk appetite rises
(Updates prices)
By Chris Baldwin
LONDON, April 6 (Reuters) - Oil prices fell below $51 a
barrel on Monday as stock markets sputtered, erasing early gains
on expectations that rich nations' efforts to stimulate their
economies may help end the global downturn sooner than expected.
U.S. stocks futures pointed to a lower open on Monday,
reversing Asian and European markets in its wake after banks
wiped out early gains on weakened investor sentiment.[]
U.S. light crude for May delivery <CLc1> was down $1.92 at
$50.59 a barrel by 1325 GMT. London Brent crude <LCOc1> fell
$1.65 to $51.82 a barrel.
Japan said it planned to spend at least $100 billion more to
help its economy survive the global crisis, as investors seized
on signs that markets may have bottomed to buy stocks and
commodities. []
In a sign appetite for risk is increasing, gold prices fell
more than 2 percent on Monday, slipping towards a
two-and-half-month low. []
Japan's Nikkei stock average hit a three-month closing high
and European shares rose, tracking a late rally in the United
States on Friday. []
Analysts said oil has been following equity markets recently
on improved sentiment after the U.S. Federal Reserve began
implementing quantitative easing through the purchase of
treasuries, but upcoming quarterly reports could dim enthusiasm.
"While the market may have discounted a weak Q1, they will
be on the lookout for Q2 perspectives in the upcoming earning
reports," said Harry Tchilinguirian of Paribas.
"Here, the prospects still look weak, implying that oil and
equities can easily retrench from recent gains."
"SUSTAINED DEFICIT"
Goldman Sachs said in a note received by Reuters on Monday
that crude oil price rallies would be short-lived until the
second half of 2009 because of weak fundamentals.
It said recent oil price rallies had been fuelled by
optimism over future stabilisation in the financial system and
in global economic growth, but for the time being these rallies
were unlikely to be sustained.
"We continue to expect that a more stable demand
environment, reinforced by the likely need for the industry to
restock during second-half 2009, will help push the oil market
into a sustained deficit later in the year," it said.
Although crude oil prices have risen roughly 16 percent so
far this year, they are almost 60 percent below their high of
more than $147 a barrel last July.
Analysts said investors might attempt to push oil towards
the $55 mark this week, should U.S. stocks rally further on
signs that the economic slump is abating and if the earnings
season does not get off to a rocky start. []
Oil rose nearly 11 percent last month and snapped two
straight quarters of double-digit decline to rally 9.5 percent
in the first quarter, thanks to a rally in global stock markets
and OPEC's production cuts.
Crude oil speculators on the New York Mercantile Exchange
cut net long positions in the week to March 31, data from the
U.S. Commodity Futures Trading Commission showed on Friday.
(Additional reporting by Christopher Johnson in London, Fayen
Wong in Perth, Angela Moon in Seoul; editing by James Jukwey)
