Oil slipped towards $53 today, as investors fretted over falling oil demand after another set of bearish US stocks and oil demand data, erasing some of the 7 per cent gains on an equities rally a day earlier.
The Dow Jones industrial average has risen 15.6 percent in the last four days, the largest four-day percentage gain since 1932, after Europe plotted a $200 billion stimulus plan, and China cut interest rates by the biggest margin in 11 years.
But oil fundamentals remained weak, with US crude stocks rising sharply last week and US September demand falling to its to its lowest level for any month in more than a decade.
US light crude for January delivery fell $1.04 to $53.40 a barrel by 5.59am, off an earlier low of $53.14, erasing some of the $3.67 gains made on Wednesday.
London Brent crude fell $1.10 to $52.82.
"The global economic meltdown will continue to have a negative impact on demand, eventually pushing oil into the $40s before the year-end," said Jonathan Kornafel, Asia director of Hudson Capital Energy.
Oil has fallen by almost $100 a barrel since hitting a record peak above $147 a barrel in July as the global credit crunch dented demand in large consumer nations.
US weekly crude stocks rose by a hefty 7.3 million barrels in the week ended Nov. 21, well above forecasts for an 800,000 barrel increase, the US Energy Information Administration (EIA) said yesterday.
Total US product demand over the past four weeks was down 6.6 per cent from year-ago levels, while September oil demand fell by 12.8 per cent versus a year ago to its lowest in 12 years, the EIA also said.
Reuters