Oil prices eased further today to deepen the previous day's 3 per cent fall after a surprise increase in US fuel stocks eased worries about meeting peak winter demand.
US light crude futures were down 24 cents at $44 a barrel after falling $1.52 a barrel yesterday, taking this week's losses to 5 per cent.
The New York Mercantile Exchange will be shut for Christmas Eve tomorrow.
Although prices are up 35 per cent since the start of the year, they have fallen sharply from the October 25th all-time high of $55.67 a barrel as consumer inventories rose and a mild start to winter capped demand, particularly in the US northeast.
Despite the region's first blast of real cold last week, stockpiles of distillates - which include winter fuel heating oil and diesel - climbed 600,000 barrels to 119.9 million barrels in the week to December 17th, government data showed.
Expectations of a draw were thwarted by refiners cranking out a record 4.2 million barrels per day of distillates, countering the weather-driven demand rise.
Analysts said the figures helped soothe some fears of a shortage this winter, but forecasts for chillier temperatures this weekend and in the first quarter kept dealers cautious.