Oil prices fell for the fourth week in a row, tumbling to levels not seen since mid-April, as US figures showed crude stock levels increasing, reinforcing market confidence that there will be enough oil to go round during the northern hemisphere winter.
Benchmark Brent North Sea crude oil for February delivery was selling for $23.84 a barrel in London by Thursday afternoon, compared with $25.81 a week earlier.
In New York, January light sweet crude was quoted at $26.05 a barrel on Thursday, against $27.17 the previous week.
The falling prices came as a result of the latest figures for US crude reserves which showed that stocks swelled by 3.1 million barrels last week.
"There has been some building in US crude stocks, but this is a fall in prices ahead of a shift in the fundamentals," said Prudential Bache analyst Christopher Bellew.
Oil prices have now tumbled $10 -- around 30 percent -- this month alone after a year of soaring prices.
Market perceptions have shifted radically from concern that oil supplies would fail to meet the heavy demand of a northern hemisphere winter, to fears that there might actually be too much oil sloshing around on the market.
The Organization of Petroleum Exporting Countries (OPEC), which increased output four times this year to coax prices down, is now thinking of cutting production at a January meeting to reverse the trend.
"The market is now building in an expectation that OPEC will cut output by half a million barrels a day, but if prices go lower than $22 it could be more," said Bellew. Other analysts cautioned that the market could have hit the bottom.
"Selling the market at current levels could be dangerous as the market appears very oversold in the short-term," said the GNI brokerage in a research note.—AFP.
©--Agence France Presse.
