Oil falls near $50

International Energy Agency cuts forecast for oil demand as U.S. stocks slip.

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By Julianne Pepitone, CNNMoney.com contributing writer

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NEW YORK (CNNMoney.com) -- Oil fell to settle near $50 a barrel Monday as the stock market slipped, after the International Energy Agency cut its forecast for oil demand.

A report from the IEA on Friday said world oil demand will fall by 2.4 million barrels a day this year. A separate inventory report last Wednesday showed U.S. oil supply is at its highest levels since July 1993.

Crude prices fell $2.19, or 4.2% to settle at $50.05 Monday.

Equities also put downward pressure on prices. The oil market has tended to follow the stocks lately, as crude investors look to the broader markets to try to gauge when fuel demand will rebound.

The stock market snapped a five-week advance Monday, ahead of earnings reports from financial companies and the possible bankruptcy of General Motors (GM, Fortune 500). The Dow Jones industrial average (INDU) lost 80 points, or 1%, around three hours into the session.

Oil prices have rapidly declined from a record high of $147.27 a barrel last summer, as consumers have cut back on energy use amid rising unemployment and uncertainty about when the U.S. economy will recover.

Gasoline: The national average price for a gallon of regular unleaded gasoline decreased to $2.051, down from the previous day's price of $2.052, according to motorist group AAA.

That's a decline of $2.063, or 50.1%, from the record-high price of $4.114 that AAA reported on July 17, 2008. To top of page

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