* Oil drops under $50, a fresh 42-month low
* Koch, Royal Dutch Shell book supertankers for oil storage
* Equities markets weaken
(Updates price, adds comment)
By Chris Baldwin
LONDON, Nov 20 (Reuters) - Oil dived under $50 a barrel on
Thursday for the first time since May 2005, deepening losses as
financial markets reflected ever lower confidence in the world
economy and evidence mounted of falling fuel demand.
U.S. crude <CLc1> fell $3.26 to $50.36 a barrel by 1536 GMT
after earlier touching a 42-month low of $49.75.
London Brent crude <LCOc1> shed $2.82 to $48.90 a barrel.
As economic slowdown has destroyed fuel demand, oil
companies plan to store millions of barrels of oil in the hope
economics will improve.
The number of U.S. workers filing new claims for jobless
benefits rose by a larger than expected 27,000 last week to
their highest level in 16 years, Labor Department data showed on
Thursday. []
"The unemployment data was yet another ugly data point in a
seemingly never ending stream of poor economic numbers," said
Michael Wittner, global head of oil research at Societe
Generale.
"What makes it hard to call a bottom is that even when oil
fundamentals firm up, if we're still having these waves of
deleveraging it can overwhelm even the oil fundamentals."
Shipping brokers on Thursday said U.S. oil trader Koch and
Royal Dutch Shell <RDSa.L> had booked supertankers capable of
storing 10 million barrels of crude, more than top exporter
Saudi Arabia produces in a day. []
FOLLOWING EQUITIES
Oil has lost about two-thirds of its value since July's
record above $147, in part because a global credit crunch has
made investors pull their money out of riskier assets.
The falls on oil have mirrored weakness on equity markets,
which dropped again on Thursday when European stocks hit their
lowest level since March 2003. <>
"We're just following in line with the equity moves," said
Energy Analyst Harry Tchilinguirian at BNP Paribas.
"Yesterday the Dow Jones fell over 5 percent, this morning
it was Japan and Asia, and no surprise -- oil followed later."
Oil differs from other commodity markets in that producer
group the Organization of the Petroleum Exporting Countries can
intervene to curb supplies, in theory providing support for
prices.
Since early September, OPEC has said it will remove around 2
million barrels per day from international markets, but the
market has taken the view that falling demand is a bigger factor
than tightening supply.
Deutsche Bank said on Wednesday oil could fall to as low as
$40 a barrel next year.
Fears about their falling revenues have prompted some
members of OPEC to urge further cuts as soon as possible and
ministers are to gather for informal talks on Nov. 29 in Cairo.
They will also meet again for a formal session on Dec. 17 in
Algeria.
(Reporting by Chris Baldwin; Editing by Anthony Barker)
