Oil prices fall as reserve hit highest since 1990

Oil prices have fallen over news that US crude reserves have hit the highest level since 1990 due to low demand amid recession. New York's main futures contract, light sweet crude for delivery in May, fell 16 cents from its closing price on Tuesday to 49.25 dollars per barrel. London's Brent North Sea crude for May delivery lost 17 cents to settle at 51.79 dollars per barrel. The US government's Department of Energy (DoE) said crude stocks surged 5.6 million barrels in the week ending April 10 to 366.7 million barrels, the highest level since September 1990. The DoE report is a key focus for the oil market because the United States is the world's biggest energy-consuming nation, followed by China. The market was also dragged lower by official data showing that the US industrial production fell in March for the fifth consecutive month, by 1.5 percent, to the lowest level in a decade amid a prolonged recession. OPEC also revised down its estimate for world crude demand on Wednesday, saying a "devastating contraction" in consumption would keep prices under pressure in the months ahead. "In the coming months, the market is expected to remain under pressure from uncertainties in the economic outlook, demand deterioration and the substantial overhang in supply," the Organization of Petroleum Exporting Countries wrote in its latest monthly report. OPEC estimated that demand would contract by 1.37 million bpd or 1.6 percent in 2009.