Oil falls for second day

Crude oil fell for a second day in New York on speculation global stockpiles will increase as the world economy remains in recession.

Factory output in Japan, the world's third-largest oil consumer, dropped for a fifth month in January, its longest losing streak since 2001, according to a Trade Ministry report today. Global demand remains weak and oil is unlikely to reach $60 a barrel this year, Qatar's Oil Minister Abdullah Bin Hamad Al-Attiyah said.

"There's nothing really out there to suggest that demand has dramatically improved," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney. "The dollar will be a key factor. If the dollar continues to head north we may see oil come under pressure."

Crude oil for May delivery fell as much as $1.26, or 2.4 per cent, to $51.12 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $51.22 at 10:09 am Singapore time.

The contract declined 3.6 per cent to $52.38 a barrel on March 27 on signs of a deepening recession in Europe. Oil gained 0.6 per cent last week.

New York oil futures has risen 16 per cent this month as a slump in the dollar made commodities cheaper for buyers spending other currencies and increased investor demand for a hedge against inflation. US oil stockpiles reached 356.6 million barrels on March 20, the highest in more than 15 years and 13 per cent more than average for the time of year, according to Energy Department records.