Oil prices slump under 50 dollars per barrel Nov 20 02:05 PM US/Eastern Oil prices tumbled under 50 dollars on Thursday, as plunging equities and weak US data sparked fresh concern that a worldwide recession could ravage energy demand, traders said. In New York, light sweet crude for delivery in December dived to 49.75 dollars a barrel -- the lowest level since January 18, 2007. The December contract expires at the close. Brent North Sea crude for January tumbled to 48.20 dollars, levels last seen in May 2005. Brent closed on Wednesday at 51.72 dollars. Both oil contracts traded below 50 dollars on Thursday for the first time in almost four years, pulled down by fears about the impact of the ongoing chronic global financial crisis, analysts said. Oil prices have now plunged by about two-thirds since striking record highs above 147 dollars in July as a global economic slowdown slashes worldwide demand for energy. "The oil market is reacting to yet more negative news on the prospects for the global economy," said IHS Global Insight oil analyst Simon Wardell. "With stock markets continuing to fall around the world, and particularly in Asia, there is just no positive news out there which could help restore confidence in oil markets." Stock markets plunged Thursday as a jump in US jobless figures and fresh job cuts worldwide deepened fears of recession and sent investors fleeing for cover. The latest economic news remained grim as the US Labor Department said new claims for unemployment benefits jumped to a 16-year high of 542,000. Later Thursday, oil prices went on to recover somewhat, with New York oil at 50.56 dollars and Brent at 49.05 dollars in late afternoon London trade. Wardell said that "the market is still searching for a floor and until there some stronger signs that supply is being cut, we are likely to see continued price weakness." Oil market sentiment was also dampened this week after broker Goldman Sachs said it would close all of its oil trading recommendations as the US investment bank "did not expect significant upside potential. "The volatility in the past few weeks has mostly been to the downside and the pressure on the oil complex has increased," Goldman Sachs said in a report. In addition, the US Federal Reserve sharply cut its outlook for the US economy for 2009, highlighting the potential for recession over the next year while leaving the door open for more interest rate cuts. The health of the US economy is vital for the oil market because the United States is the world's biggest oil consuming nation. Torbjorn Kjus, analyst at DnB NOR Markets, said that he expected prices to fall even further in the coming months. "We are expecting further price weakness in the short term," Kjus said in a research note to clients. "Fundamentals (of supply and demand), psychology, sentiment and technicals are not looking good," he said. "We are however expecting to see the market bottom out before year-end and a price recovery starting in January." On Monday, the Organization of the Petroleum Exporting Countries (OPEC), whose members produce 40 percent of the world's oil, said it was ready to intervene on a regular basis to help prop up prices. "The recent fall in prices largely reflects concern that OPEC is unwilling to make the oil output adjustments necessary to compensate for weakening oil demand," added Dresdner Kleinwort analyst Gareth Lewis-Davies.