Oil prices steadied today after steep losses as concern faded over potential supply shortfalls ahead of winter and Nigerian unions called off a strike that could have disrupted exports.
US light crude dropped 10 cents to $46.77 a barrel, bringing cumulative losses to $2.09 since November 10th, the last day prices ended higher.
London Brent crude was down one cent at $43.03 a barrel. Prices have fallen almost $9 from a record $55.67 in late October as fuel stockpiles in the United States have increased and potential threats to global supplies have eased.
"The supply-side issues that really pushed up prices have dissipated. Fundamentals continue to be focused on stocks, and US crude stocks have increased for the last seven weeks," said Mr Daniel Hynes, industry analyst at ANZ Bank in Melbourne.
A rebound in crude inventories in the United States, the largest energy consumer, has helped bring oil prices down from their peaks as supplies have risen by 22 million barrels, or 8 per cent , in the past seven weeks.
Analysts are predicting another rise in US crude inventories when the government Energy Information Administration (EIA) releases its weekly supply status report tomorrow.
Heating oil inventories in the key markets of the United States, Germany and Japan are much lower than normal for the time of year, spurring fears of a supply squeeze should winter hit early or hard. Temperatures in the key heating-oil consuming region of the US Northeast were below normal, but were expected to warm this week before dropping the following week.
Iraqi oil infrastructure continued to come under attack by saboteurs, who blew up five oil wells west of the Kirkuk oil centre on Monday and set fire to a storage tank at a pumping station along the main export pipeline to Turkey.
Oil Ministry spokesman Mr Assem Jihad said the line, which had been pumping at about 500,000 barrels daily to Turkey's Mediterranean port of Ceyhan, was not in operation at the time of the attack. "We were testing the line, but we rely on exports from the south," he said.