Updated from 1:19 p.m. EST

Crude oil tumbled to around $50 a barrel Monday, extending a speculator-led slide that has now lasted four days. Traders cited a growing belief that a Nigerian oil workers' strike won't materialize.

The December futures contract ended floor trading down $1.63 to $50.13, after touching a three-week low of $49.15 earlier. The drop continued a selloff that started last Wednesday when weekly inventory data showed gains in U.S. crude and gasoline stockpiles.

Fadel Gheit, a senior energy analyst with Oppenheimer & Co., said the selloff was driven by speculators scrambling after learning that oil workers in Nigeria would probably call off their plans to strike later this month. News of the strike initially caused oil prices to rise Monday morning.

"Apparently, the Nigerians decided to change their minds, as they often do," Gheit said. "So this market is being driven by speculation going in and then speculation going out."

Nigeria exports about 2.5 million barrels a day. The strike, reportedly scheduled to start Nov. 16, would spook the energy markets at a time of unusually strong demand, tight supplies and geopolitical instability.

"Oil prices are driven by speculation," Gheit said. "The situation in Iraq is not getting better. It's actually going to get a lot worse. All in all, speculation will continue to drive prices. Eventually, the oil market, which fundamentally cannot support prices at these levels, will correct itself. It's only a matter of when and how much."

Until last week, prices had hit record highs on a regular basis, closing above $55 a barrel, as news of violence in Iraq flooded the airwaves. The prospect of an unusually cold winter in the U.S., along with an oil-swilling economic expansion underway in China, drove expectations for soaring demand.

Last Wednesday, a report from the U.S. government showed gains in the country's crude and gasoline stockpiles, and prices began what is now a four-day slide, lowering the price of crude by over 10%.

Jason Trennert, chief investment strategist with ISI Group, said he thinks traders continue to focus on the upbeat inventory news.

"The inventory numbers from recent weeks, along with signs that the global economy may not be as strong as people suspected, are conspiring to bring oil prices down here," Trennert said.

Paul Nolte, director of investments with Hinsdale Associates, said many hedge funds are leaving the oil market and sellers are focused on the inventory news, despite word that Nigerian oil workers called a strike for later in the month and production would slow in Kuwait due to power outages over the weekend.

"Investors are saying, 'OK, we have enough oil and we're not worried about that anymore,'" Nolte said. "We've thought for a while that anything over $50 was unsustainable. Just watching recent movements in the oil market, it has looked pretty speculative.

"Fair market value for oil is probably somewhere between $40 and $45 a barrel over the next two to three months," Nolte said, a level that still poses a considerable drag on the U.S. economy. "We'll get down there. Longer term, we can still get up to $60, but the current move was more speculative than fundamental."