Crude oil fell for a third day on concern that fuel demand will drop as the swine-flu outbreak curtails travel and delays a recovery from the global recession. Oil, gold and copper declined yesterday as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. Crude rose in eight of the past 10 weeks as the stock market climbed on speculation that the economy and energy consumption would rebound later this year.

“There’s a potential that a swine-flu outbreak will crimp economic growth,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There’s also recognition that the recent rally was overly optimistic. Demand isn’t recovering and more negative economic surprises are probably in store.”

Brent crude for June settlement fell 33 cents, or 0.7 percent, to end the session at $49.99 a barrel on London’s ICE Futures Europe exchange.

One of the biggest renewable energy manufacturers in Britain announced on Tuesday it is to cut more than half its UK jobs, blaming the government for failing to support the sector. In a grave blow to the government’s ambitions to create a “green” export industry, Vestas, the world’s biggest maker of wind turbines, will axe about 600 of its 1,100 UK employees, probably closing its factory in the Isle of Wight and cutting jobs elsewhere in the UK.  Engel, chief executive of Vestas, told the Financial Times: “We had been planning additional investment in the UK because of government targets to increase renewables. But the UK is probably one of the most difficult places in the world to get permission for wind projects. We can’t afford to keep on this capacity.”  The blow comes less than a week after Alistair Darling trumpeted the role of low-carbon industries in job creation, announcing new funding for renewables in his Budget. Mr Engel said the cuts were not the result of the recession – the company’s order book had recovered and he predicted 20 per cent growth in 2009. The reason was rather the inability of the government to deliver the conditions needed for renewables growth. “There are two sets of politicians, Whitehall politicians and local politicians,” Mr Engel said. While the former group encourages renewables, which bring new jobs, local politicians tend to oppose wind farms, meaning few are built.

Businesses are losing their enthusiasm for environmental issues, just as the government is ramping up its efforts to combat global warming, a new poll suggests. More than eight in 10 companies think the government’s targets of cutting emissions by 80 per cent by 2050 are unattainable, according to a survey of 300 UK businesses by RWE Npower, the energy company. The poll was carried out before the Budget when ambitious emission cuts were set out.

Exchange rates, which have made imports of wind turbine components from Europe more expensive, also played a part in Vestas’ decision, Mr Engel said. “The UK currency has dropped significantly against the euro, which has made things difficult.”

But the main reason, he said, was the problem with building renewable energy in the UK. Although the UK has the best wind resource and the most generous subsidy system in Europe – paid for by electricity consumers – it has failed to generate the volumes of electricity necessary to meet European Union targets, which will require 35-40 per cent of electricity to come from renewables by 2020, against about 5 per cent today.

Mike O’Brien, minister at the Department of Energy and Climate Change, sought to play down the significance of the job cuts. He said: “It’s clear that Vestas recognises the potential of the UK wind market. Measures set out in the Budget will offer renewed support to the wind industry and help move potential projects towards construction, which could mean more business for Vestas.”

He said the government would be offering support to those affected by the redundancies.

But, making clear that he believed Vestas would continue to retain a production base in the UK, he added: “Vestas have indicated the steps we have taken [in the Budget] will have a positive influence on the possibility of them producing blades in the UK.”

Blades are the single component of turbines that Vestas makes in the UK. Other parts are imported.

Crude oil fell for a second day, dropping below $50 a barrel, on concern that the swine-flu outbreak will curtail travel and delay a recovery from the global recession. Oil declined as the World Health Organization raised its global pandemic alert to the highest since the warning system was adopted in 2005, saying the disease is not containable. U.S. crude supplies probably rose last week by 1.8 million barrels from their highest level since September 1990, according to a Bloomberg survey of analysts. “From the oil market point of view, it’s the impact on travel and economic activity from swine flu that could affect prices,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “The market has been clanging around the high $40’s to the low $50’s for a while now and can’t get past the top side because the inventories are so high.” Crude oil for June delivery fell as much as $1.06, or 2.1 percent, to $49.08 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $49.25 a barrel at 2:35 p.m. Singapore time. Prices are up 10 percent this year. Futures declined $1.41 to $50.14 yesterday.

Brent crude for June settlement fell as much as $1.05, or 2.1 percent, to $49.27 a barrel on London’s ICE Futures Europe exchange, and traded at $49.40 at 2:35 p.m. Singapore time. The contract dropped $1.35, or 2.6 percent, to end yesterday’s session at $50.32 a barrel.

Scottish & Southern Energy has agreed a five-year coal supply agreement with UK Coal for its West Yorkshire power station to keep transport costs down. The recent installation of flue gas desulphurisation equipment at the Ferrybridge power station means the UK’s higher-sulphur coal can be used to generate power but SSE opted to take supplies from exclusively English-based UK Coal. Under the agreement with UK Coal, Perth-based SSE will buy 3.5 million tonnes of coal between the end of this year and 2015, enough to meet around 15% of the station’s coal requirements. This will be taken from deep mine and open-cast sites, including the nearby Kellingley Colliery in North Yorkshire. One option for transport between the two locations is canal barge. SSE spokeswoman said the utility opted for the deal with UK Coal, its first contract with the company, rather than suppliers with operations further afield, because of the proximity of its sites. “This is about transportation costs. It’s not a Scottish-English thing. This is a stand-alone kind of deal and it is more about a local supplier.”

SSE does not disclose where it sources its coal from but in recent years typically around half of the UK’s coal has come from Russia, Poland, South Africa and Colombia. The price SSE pays will be linked to global coal prices, but with a ceiling and floor. SSE has agreed a secured loan to UK Coal to help it upgrade several sites. SSE will receive interest on the advance, which is to be repaid by 2014. Ian Marchant, chief executive of SSE, said: “With its higher sulphur content, the UK’s coal has previously been unsuitable for use in SSE’s power generation plants. Our investment in equipment to remove emissions of sulphur means we can now make this substantial commitment to an indigenous source of fuel, thereby supporting jobs in the UK’s mining industry.”

Marchant sought to tackle concerns about the environmental impact of coal-fired power: “We are aiming to reduce the carbon intensity of our power generation by 50% by 2020, but the secur-ity of the UK’s energy supply will continue to require a role for coal for the foreseeable future.”

The deal comes after the announcement in January that ATH Resources had won a three-year, £40m deal to provide ScottishPower with coal from its Muir Dean open-cast mine in Fife.

The contract to supply 800,000 tonnes of coal from ATH’s new Muir Dean mine to the energy firm’s nearby Longannet power station begins this month.

UK Coal said yesterday it made a pre-tax loss of £15.6m in 2008. It made a profit of £69m the year before after posting a smaller than normal gain in its property portfolio.

However, news of the contract win with SSE, as well as new or amended long-term deals with Drax, E.ON and EDF Energy boosted its shares by 8.75p, or 8.2%, to 115p.

Cambridge Econometrics predicted carbon dioxide emissions will fall by around three per cent a year in 2009 and 2010 as a result of less economic activity and more use of gas instead of coal to produce electricity. However the continued reliance on coal and gas-fired power stations will mean emissions fall more slowly over the long term. In addition the twice-yearly UK Energy and the Environment report found the Government will not meet its targets to increase electricity from renewables. The “ambitious” EU goal for the UK to produce 15 per cent of all energy from sources such as wind power and biomass by 2020 is set to be missed by a “wide margin”, the analysts said. A separate report from the UK Energy Research Centre (UKERC), based on 500 international studies, said Britain lagged behind other countries in the use of cleaner modes of travel. It added that there was short-term potential in improvements to bus, cycling and walking infrastructure, car sharing or school travel plans. But the report stressed that the biggest long-term impact would come through altering travel patterns so that fewer trips relied on the car.

The reports come as the Chancellor Alistair Darling lays out the first three five-year “carbon budgets” for reducing emissions and the target for cuts by 2020 alongside the Budget on Wednesday. The targets are expected to follow the recommendations of the Committee on Climate Change but fall well below the 42 per cent target recommended by environmentalists. Friends of the Earth wants at least £30 billion to be invested each year to deliver a low carbon recovery. The group is calling for a green investment bank and Treasury- backed green bonds as well as investment in green energy schemes and preventing energy waste.

Despite a steady drumbeat of poor financial news, investors continued to prop up oil prices Thursday, betting the global economy would turn around this year.Benchmark crude for May delivery rose 82 cents to $50.07 a barrel on the New York Mercantile Exchange. In London, Brent prices gained $1.21 at $53.00 a barrel on the ICE Futures exchange.”The only thing keeping oil from going on a death march is optimism from financial companies, banks, hedge funds,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. “Sure, this is a shaky period. But if you invest in crude oil futures, when the economy finally makes its move, you’ll be the beneficiary,” Kloza said. “That’s what they’re thinking.” It may anger some to know that oil prices, and therefore the cost of gasoline, heating oil and millions of petroleum-based products, could be lower if not for investors who have no intention of using the crude stocks they buy. But Kloza said investor money also helps drive new oil production and drilling operations.

Analyst and trader Stephen Schork said the United States Oil Fund, which at times controls enough oil contracts to supply the world with crude for a day, has pumped a lot of money into crude. Aggressive buying by this and other so-called exchange-traded funds have effectively pushed prices higher, he said, and that forces everyone to re-evaluate how they’re trading.

“You could sell in this market, like I try to do,” Schork said. “Or you buy into it like everyone else, just put the blinders on and you say, ‘You know what, crude was $150 a barrel last year. It’s only going to go higher.’”

Oil prices have hovered around $50 this month even though a variety of reports show the world is losing its appetite for petroleum. In the U.S., storage facilities for crude oil have been swelling since the end of February. They haven’t held this much oil in almost 19 years.

Stores of natural gas also are rising. The Energy Information Administration said Thursday that U.S. natural gas inventories rose by 21 billion cubic feet for the week ended April 10. The 1.695 trillion cubic feet in storage was 23 percent above the five-year average.

Demand for oil is so low that the total amount of petroleum products supplied to the market last week plunged to levels not seen since right after the Sept. 11, 2001 terrorist attacks, Schork said.

Elsewhere, earnings reports and government data gave a mixed look at the health of the U.S. economy. Upbeat earnings reports from banks like JPMorgan Chase suggested some businesses might be stabilizing.

But the government said Thursday that housing construction in March dropped to the second lowest level on record. The Commerce Department reported that construction of new homes and apartments dropped by 10.8 percent last month to a seasonally adjusted annual rate of 510,000 units.

And while new jobless claims fell more than expected, the Labor Department said the number of Americans continuing to receive unemployment insurance benefits rose above 6 million for the first time.

Still, investors seem to have looked past the dismal news.

“Demand hasn’t come back yet, but the market is expecting it to turn around in the second half and grow next year,” said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.

Despite the effect of speculators, a barrel of oil costs less than half of what it fetched a year ago. And manufacturers continue to buy futures contracts with the expectation that they’re not going to fall any further, said Paul Smith, chief risk officer for the Mobius Risk Group.

The Houston-based energy management consulting firm works with paper manufacturers, chemical companies and other groups that have large petroleum needs.

“I wouldn’t bank on another collapse, I think we’ve seen it,” Smith said. “We’re saying be prepared for stability this year and price spikes in 2010 and 2011.”

At the pump, gas prices ticked up less than a penny to a national average of $2.052 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Gas prices are 14.2 cents a gallon higher than last month but $1.347 a gallon cheaper than a year ago.

In other Nymex trading, gasoline for May delivery rose by 2.42 cents to $1.4710 a gallon and heating oil gained 2.56 cents to $1.4266 a gallon. Natural gas for May delivery slipped 9.4 cents to $3.599 per 1,000 cubic feet.

The price of oil has risen sharply after big rises in US stock markets fuelled cautious optimism about the global economic outlook. The price of US light crude rose $2.74, or 5.5%, to $52.12 a barrel. London Brent oil climbed $2.50 to $54.09. The price rises were sparked by a sharp rally on Wall Street, where shares jumped by 2.9%, and by better than expected sales by leading US retailers. Light trading in oil in the run up to Easter contributed to the sharp rise. “A lot of little things are giving investors hope that maybe the economy has seen the worst,” said Andrew Lebow at MF Global. One of the biggest banks in the US, Wells Fargo, announced on Thursday that it expected to report record profits of $3bn (£2bn) for the first quarter of this year. Also on Thursday, The International Council of Shopping Centers (ICSC) announced that retail sales in March had fallen by 2.1% compared with a year earlier, less than many analysts had expected. “People are buying oil when they see signs of economic hope,” said Phil Lynn at Alaron Trading.