NEW YORK — Oil prices briefly fell below $50 per barrel yesterday for the first time since May 25, 2005, after the government reported larger-than-expected jumps in crude oil and gasoline inventories.

Oil has dropped 17 percent since the end of 2006 amid weeks of mild winter weather in the U.S. Northeast, a key consumer of heating fuels, and growing energy stockpiles.

"There's no doubt that this is significant," said Phil Flynn of Alaron Trading Corp. "If you're a bull, the only thing you can hold your hat on is they didn't close below $50."

The price for a barrel of light, sweet crude for February delivery fell as low as $49.90 on the New York Mercantile Exchange but spent only a moment below the $50 threshold. It settled at $50.48, down $1.76 from Wednesday's settlement price.

Jim Ritterbusch, president of Ritterbusch & Associates, said prices could continue to fall toward $47 in the next two weeks, unless the Organization of Petroleum Exporting Countries calls for a meeting.

"The market is still seeking a bottom," he said, "and we had another bearish element tossed at it in the form of these negative weekly statistics."

U.S. crude oil stocks rose by 6.8 million barrels to 321.5 million, according to a report by the Energy Information Administration. Analysts had been expecting an increase of just 325,000 barrels, according to a Dow Jones Newswires survey. The EIA said inventories are above the upper end of the average range for this time of year.

Gasoline inventories, meanwhile, rose by 3.5 million barrels to 216.8 million, above analysts' expectations of a 2.6 million barrel rise. Distillate fuel inventories, which include heating oil, rose by 900,000 barrels to 141.9 million barrels, compared with analysts' expectations of a rise of 1.3 million barrels.

The EIA said inventories for both gasoline and distillate fuels are at or above the upper end of the average range for this time of year.

March Brent crude on London's ICE futures exchange fell $1.03 to $51.75.

Gasoline prices fell 2.3 cents to $1.3553 a gallon.

Earlier in the day, prices were buffeted by a recent cold spell in the Northeast U.S. and forecasts of slow demand growth from the International Energy Agency.

In lowering expectations for this year as well revising last year's figures downward, the Paris-based IEA cited mild winter weather that has crimped energy demand and weaker expectations for U.S. economic growth.

In its closely watched monthly oil market report, the energy watchdog forecast global oil demand growth this year of 85.77 million barrels a day, down 160,000 barrels a day. And it said oil demand growth last year was 120,000 barrels a day lower.

Oil powerhouse Saudi Arabia remans undeterred by crude's recent drop.

Saudi oil minister Ali Naimi, who earlier this week said he opposed calls from other OPEC members for new cuts in production, announced yesterday his country planned to increase its crude oil production capacity nearly 40 percent by 2009 and double its refining size over the next five years to keep pace with growing global demand.

Naimi blamed the sharp rise in global crude prices over the past two years mostly on "insufficient investment and rising energy demand," especially from the booming economies of Asia.

"The rise has been a wake-up call for the industry and for producers and consumers alike, who are now beginning to address deliverability problems head on," he said at an international energy conference in New Delhi.

But Yemen's oil minister, Khalid Mahfoudh Bahah, who was also attending the conference in New Delhi, said he expects oil prices to average between $55 a barrel and $60 a barrel in the coming months.