The two-day losses in oil prices have extended after an unexpectedly large rise in US crude inventories spurred speculative funds to take profits out of record high prices.
US light, sweet crude oil fell by more than $1 a barrel in active trade today - but recouped some of the losses to stand 64 cents lower at $51.82 a barrel in early European trading. It hit a record high $55.76 three days ago.
London Brent crude lost 70 cents to $48.75 a barrel, more than $3 below Wednesday's all-time high.
Prices fell lower yesterday after US government data showed a bigger-than-expected increase of four million barrels in weekly crude oil inventories, narrowing the supply deficit against last year to nine million barrels.
There were also signs of large speculative hedge funds, who have boosted their presence on energy markets this year amid paltry returns in other areas, moving some resources out of oil toward equities and the US dollar, both of which rallied.
Oil is still up nearly 60 per cent this year and almost $10 over the past two months, driven by intense demand growth that has pushed global production to its limit and stoked fears that refiners have not made enough heating oil to last the winter.