NEW YORK (Reuters) - Oil prices tumbled nearly 7 percent on Tuesday to below $51 a barrel after data showed the U.S. economy shrank in the third quarter at its fastest pace in seven years, stoking concerns fuel demand will slow further.
Revised U.S. Commerce Department data showed third-quarter gross domestic product dropped 0.5 percent against a year earlier, the sharpest fall since the third quarter of 2001.
U.S. crude settled down $3.73 at $50.77, partially erasing a near 9 percent jump on Monday. London Brent crude traded down $3.58 to settle at $50.35 a barrel.
“The focus in the oil markets is again on softening demand in the wake of a weak GDP,” said Phil Flynn, an analyst at Alaron Trading.
U.S. stocks extended losses, sending the Nasdaq market down more than 2 percent, as investors pummeled technology shares on concerns about the deepening economic downturn.
Slowing demand and recession concerns have knocked oil from its peak above $147 a barrel in July, prompting members of the Organization of Petroleum Exporting Countries to call for further supply reductions to support prices.
OPEC ministers next gather in Cairo on November 29, but that meeting has been called a consultative session, with its next policy-setting meeting scheduled for December 17 in Algeria.
Price hawk Iran on Tuesday said non-OPEC states should cooperate with OPEC in stabilizing the oil market because, if the group acts alone, prices will continue to fall.
Russia’s energy minister said he would not rule out cutting production along with OPEC, although analysts said it would be difficult for the giant exporter to take meaningful action.
OPEC members Iran and Venezuela have called on the cartel to cut production by at least another 1 million barrels per day, after last month’s 1.5 million bpd cut failed to lift prices.
OPEC President Chakib Khelil said on Monday the current market weakness implied the need for a reduction of more than 1 million bpd.
A Reuters poll of analysts ahead of weekly U.S. government inventory data due Wednesday forecast an 800,000-barrel build in crude stocks for the week to November 21, an 800,000-barrel draw in distillate stocks, and a 400,000-barrel rise in gasoline inventories.
“People are expecting builds on crude stocks when EIA data is released on Wednesday, so traders are factoring that in,” said Mark Waggoner, president of Excel Futures.
Reporting by Matthew Robinson and Gene Ramos; Jane Merriman and Barbara Lewis in London and Maryelle Demongeot in Singapore; Editing by Walter Bagley