U.S. oil futures closed below the psychologically important $50 level—possibly signaling more declines to come and a retest of the March lows.
West Texas Intermediate settled down $1.67 at $49.19 per barrel, the first close below $50 since April 2. U.S. government data Wednesday showed a bearish increase in crude inventories last week of 2.5 million barrels, slightly more than expected. The stronger dollar was also a negative.
Some strategists say the latest move down could be setting oil up for a run at the March low, just above $42 per barrel. But crude could also temporarily stay trapped in a range on both sides of $50, suspended by the pull of heavy refining demand and the pressure from increased supply from Saudi Arabia and Iraq.