May 2 (Bloomberg) -- Crude oil fell to a two-month low amid speculation that slower economic growth in the U.S., Europe and Japan and increased output will bolster stockpiles.

Oil has plunged 15 percent since reaching a record on April 4 as U.S. supplies jumped close to a three-year high. Manufacturing in the dozen nations that use the euro contracted for the first time in almost two years in April, a sign that record oil prices are damping growth. U.S. manufacturing expansion slowed last month, a separate report showed.

``The excess inventory is having a big effect on prices and we should continue until we get to the mid-$40s,'' said Bill O'Grady, director of fundamental futures research with A.G. Edwards & Sons Inc. in St. Louis. ``The number out of Europe is especially disturbing because it shows that manufacturing is contracting.''

Crude oil for June delivery fell 27 cents, or 0.5 percent, to $49.45 a barrel at 11:24 a.m. on the New York Mercantile Exchange. Futures touched $49.03, the lowest since Feb. 22. Prices are up 33 percent from a year ago.

There is no trading of Brent crude oil futures on the International Petroleum Exchange in London because of the May Day holiday.

An index based on a survey of about 3,000 purchasing managers in Europe compiled by NTC Research Ltd. for Reuters Group Plc fell to 49.2 from 50.4 in March, according to figures available today. Economists forecast a decline to 49.8, the median of 35 forecasts in a Bloomberg survey showed. The index hadn't dropped below 50, which indicates contraction, since August 2003.

U.S. Economy

The pace of U.S. manufacturing growth slowed in April to the lowest since July 2003, as factories reduced orders to relieve bloated inventories, a private survey showed. The Institute for Supply Management said today that its factory index fell to 53.3 from 55.2 in March.

U.S. crude-oil stockpiles probably rose 1.6 million barrels last week, according to the median forecast of seven analysts surveyed by Bloomberg. Inventories rose 5.4 million barrels to 324.4 million in the week ended April 22, the highest since May 2002, an Energy Department report showed last week.

Prices are expected to decline this week on speculation U.S. refiners have enough supplies to meet summer demand, according to a Bloomberg survey of 55 analysts and strategists conducted on April 28. Thirty-two of them, or 58 percent, predicted oil prices will fall in the most bearish Bloomberg market sentiment survey since November.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: May 2, 2005 11:26 EDT