Oil back to $50 as economic woes persist

Crude prices fall after climbing in the previous session, as investors mull economic data.

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By Ben Rooney, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The price of oil fell Tuesday, after a big rally in the previous session, as investors looked past the government's latest economic intervention to focus on the long-term economic outlook and waning energy demand.

Light, sweet crude for January delivery fell $3.73 to settle at $50.77 a barrel.

The selloff came a day after oil surged $4.57 a barrel as investors cheered the U.S. government's rescue plan for ailing financial services giant Citigroup.

But Monday's upbeat sentiment was tempered Tuesday by mixed economic data that highlighted concerns about waning demand for gasoline and other petroleum products.

"The latest numbers are definitely putting pressure on oil," said Peter Beutel, oil industry analyst at Cameron Hanover. "Any time we get bearish economic information that pushes oil lower."

As the global economy slows, the price of oil has fallen more than 60% from July's all-time high above $147 a barrel.

The Commerce Department released its revised reading on third-quarter gross domestic product. The GDP decline for the quarter widened to an annual rate of 0.5% from the initially reported 0.3%.

While the GDP reading marked the biggest drop in economic activity since 2001, the 0.5% decline was in line with expectations of economists' surveyed by Briefing.com.

Separately, the Conference Board's November reading on consumer confidence rose to 44.9 in November from an all-time low of 38 in October. It was a larger than expected increase but the index remains at historically low levels, as the weak economy weighs on household budgets.

Also on Tuesday, government officials announced a new program aimed at increasing the availability of consumer loans, such as car loans, credit cards and student loans, according to published reports. The initiative is aimed at boosting the economy at the consumer level.

Oil traders are also looking ahead to an informal meeting of the Organization of the Petroleum Exporting Countries set to take place this weekend.

OPEC will hold its regularly scheduled meeting Dec. 17 in Algeria. The cartel cut output by 1.5 million barrels a day last month in an effort to slow the rapid decline of oil prices.

Analysts say OPEC could announce an additional production cut at its next meeting.

Retail gasoline prices continued to retreat. The national average price for a gallon of regular gas fell another 2.3 cents overnight to $1.885 a gallon, according to a daily survey by AAA.  To top of page

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