Updated from 12:34 p.m. EDT

Crude oil prices tumbled Tuesday, edging closer to $50 a barrel, as data suggested a slowdown in worldwide oil consumption.

The May futures contract for light, sweet crude closed down $1.85 to $51.86 a barrel in Nymex floor trading, the lowest it has been since the last week of February. Unleaded gasoline futures were selling for $1.534 a gallon, down about 2 cents.

May crude has fallen some $7 from its record high of three weeks ago.

On Tuesday, the International Energy Agency lowered its forecast for worldwide oil consumption, highlighting a decrease in Chinese demand growth to 5.4% in the first two months of 2005, compared with 20.8% in the same period a year ago. Chinese demand for oil has been routinely cited by analysts as one of the main reasons for the current tightness in the oil markets.

Another bearish report released from a brokerage firm helped push oil prices down. Credit Suisse First Boston analyst Andrew Garthwaite in London reduced his overweight position on energy stocks to 2% from 6% and said the sector "is vulnerable to near-term correction in the oil price."

"The market is finally reacting to supply and demand fundamentals," said Thorsten Fischer, senior economist at Economy.com. Fischer said global oil supply had been steadily on the rise well before the last rally in October 2004, resulting in a market that is well supplied today. He estimated oil prices will trade at an average of $46 a barrel throughout the year and reach $42 by year-end.

Rising interest rates, which would essentially make leveraged investments in oil and other commodities more expensive, could presumably help lower oil prices by shunning away speculative buying, Fischer said.

Further, uncertainties on whether OPEC will go ahead with its pledge to increase output resurfaced Tuesday as

Reuters

cited OPEC officials from both Nigeria and Algeria questioning the need for an additional oil injection.

At this time last year, oil was trading at roughly $38 a barrel and was just beginning a spring rally that would take prices past record highs set during the lead-up to the first Persian Gulf War in 1991.

In company news Tuesday, the oil and gas drilling contractor

GlobalSantaFe

(GSF)

said it will make a public offering of $1.2 billion worth of ordinary shares, to be priced on April 14. The company said the money will be used to buy back company shares owned by Kuwait Petroleum Corporation. Shares fell $1.19, or 3.20%, to $35.94.

Royal Dutch/Shell

(RD)

is close to an agreement with

OAO Gazprom

, the Russian state-owned natural gas producer, which will enable Shell to tap into Russia's largest gas development,

Bloomberg

reported. In an asset swap, Shell will receive 50% of the Zapolyarnoye project in Siberia in return for 25% of the $12 billion Sakhalin oil and gas development off Russia's Pacific Coast. Shell shares dropped 87 cents, or 1.42%, to $60.53.

Shares of major oil producers were mostly down.

Exxon Mobil

(XOM) - Get Report

fell 14 cents, or 0.23%, to $60.15;

ChevronTexaco

(CVX) - Get Report

lost 85 cents, or 1.49%, to $56.02;

BP

(BP) - Get Report

dropped $1.23, or 1.93%, to $62.39; and

ConocoPhillips

(COP) - Get Report

rose $2.52, or 2.28%, to $107.81.

One company that stood out was

Berry Petroleum

(BRY) - Get Report

. The independent oil and gas company that operates in the western U.S. was raised to outperform from market perform by analyst Wayne Andrews at Raymond James.

The company's high net margins and moderate financial leverage make its shares "an attractive buying opportunity," Andrews said in a report. Shares rose 49 cents, or 1%, to $49.60.