Oil prices stayed weak at just above $50 a barrel this morning.
US crude fell 8 cents to $50.40 a barrel earlier this morning after ending down $1.76, or 3.4 per cent, at $50.48 today. London Brent gained 2 cents to $51.77 a barrel.
Oil touched $49.90 today, the lowest since end-May 2005, and analysts said that while crude could get support today from short-covering ahead of the weekend, further price erosion would be expected over the short term.
Prices broke the psychologically crucial $50 mark after US government data showed crude oil stockpiles jumped by 6.8 million barrels last week, well above analysts' expectations of a 100,000-barrel rise.
Heating oil and gasoline futures also ended sharply lower after US distillate supplies, including heating oil, rose 900,000 barrels, while gasoline stocks jumped 3.5 million barrels.
Besides high fuel stockpiles and balmy US weather in previous weeks that have cut demand for winter heating oil, the recent sell-off was compounded by Saudi Arabia's comment earlier this week that Opec output cuts were working well and an emergency meeting of the cartel was not necessary.
Oil prices have fallen about 18 per cent so far this year and 36 per cent since hitting a record-high of $78.40 a barrel in mid-July 2006.