Oil fell below $46 a barrel to near four-year lows today, extending four consecutive days of falls as continued demand worries minimised bullish draws in US oil stocks.
Oil prices have lost more than $100 a barrel since an all-time high of $147.27 hit in July, and some 16 per cent from last week, as demand is seen weakening worldwide and analysts expect it to contract this year and next.
US light crude for January delivery fell 83 cents to $45.96 a barrel by 2.28am, off an earlier low of $45.75, the lowest since a $45.42 low hit on February 10th, 2005.
Oil settled down 17 cents at $46.79 yesterday.
London Brent crude edged down 34 cents to $45.10. "Stabilisation in macroeconomic expectations is likely to precede any switch in oil market sentiment away from a mainly demand-side focus," Barclays Capital said in its weekly oil data review.
Bullish oil data yesterday pushed prices higher during the session, when the US Energy Information Administration said crude stocks fell 400,000 barrels in the week to November 28th, against an expected 1.7 million barrels build.
Distillate stocks, which include heating oil, fell 1.7 million barrels to 125 million, against a forecast for a 300,000-barrel increase, while gasoline supplies dropped 1.6 million barrels, having been expected to rise by 900,000 barrels.
But the product inventory falls came amid lower refinery utilization, which fell 1.9 percentage points to 84.3 per cent of capacity last week against a predicted rise of 0.2 percentage point, showing weakening demand.
"Refiners began to cut processing rates significantly," said Jan Stuart, economist in New York for UBS, in a report.
Reuters