Oil Dips Under $50 on Recession Fears

By PABLO GORONDI

Oil prices plunged over $3 Thursday, briefly dipping below $50 a barrel as the highest U.S. unemployment figures in 16 years and plummeting stock markets caused investors to price in lower crude demand.

Light, sweet crude for December delivery was down $3.25 to $50.37 a barrel in electronic trading on the New York Mercantile Exchange by early afternoon in Europe.

Crude briefly dipped below $50 for the first time since Jan. 18, 2007, when prices struck $49.91, just a penny above the 2007 low.

On Wednesday, the contract fell 77 cents to settle at $53.62.

In London, January Brent crude fell $2.89 to $48.83 on the ICE Futures exchange.

Markets worried that a steep economic slowdown would cut demand for oil.

"People are saying this slowdown could be the worst since the Great Depression," said Toby Hassall, an analyst with investment firm Commodity Warrants Australia in Sydney. "There's definitely fear out there that it's going to be pretty severe."

There was bad economic news Thursday out of the U.S., with new claims for unemployment benefits jumping last week to a 16-year high, providing more evidence of a rapidly weakening job market expected to get even worse next year.

The government said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. That's much higher than Wall Street economists' expectations of 505,000, according to a survey by Thomson Reuters.