Oil May Fall to $50

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Crude-oil future prices have fallen almost a third in New York since reaching a record $147.27 a barrel on July 11, driven by concerns a worsening financial crisis in the U.S. is crimping energy demand. U.S. oil use is declining faster than expected, while European consumption is falling ``rapidly,'' and OPEC production capacity is ``just about to soar,'' Merrill said.

``Combined, these factors represent significant short-term headwinds for both upstream and downstream companies alike,'' Merrill analysts Mark Hume and Alexis Clark said in the report. ``Notionally it is conceivable that in a worst-case scenario global oil demand actually contracts in the near-term as it did back in the 1980s post the Iranian Revolution.''

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