LONDON (AFP) — World oil prices tumbled on Wednesday to strike a four-year low point in London in volatile pre-Christmas trade as economic gloom weighed on the market, analysts said.
On London's InterContinental Exchange (ICE), the price of Brent North Sea crude for February delivery tumbled as low as 37.49 dollars per barrel -- which was the lowest level since December 13, 2004.
Brent crude later stood at 37.95 dollars a barrel, down 2.41 dollars from the close on Tuesday.
Light sweet crude for delivery in February shed 1.98 dollars to 37.00 dollars a barrel on the New York Mercantile Exchange (NYMEX).
New York crude for January had tumbled last Friday to 32.40 dollars -- which was the lowest level since February 9, 2004 -- as investors raced to sell before the contract's expiry.
"Economic concerns continued to be the focus with expectations of further weakness in demand pushing prices lower," said analysts at the John Hall Associates energy consultancy.
The price of crude oil has now collapsed by as much as 78 percent since hitting record highs above 147 dollars per barrel in July, as a sharp global downturn has slashed the world's demand for energy.
Later on Wednesday, traders will digest the latest weekly update on energy inventories in the United States, which is the world's biggest crude oil consumer.
The US government's Department of Energy wwas releasing its snapshot of American crude inventories for the week ending December 19.
Analysts polled by Dow Jones Newswires expect crude oil stocks to have dipped by 200,000 barrels in the past week and distillates, which includes heating oil, to slip by 100,000 barrels.
Latest US data showing that the world's biggest economy remains mired in a recession is likely to keep crude oil prices under pressure in the immediate term, analysts said.
"It is just more of the same on the economic front," said Jason Feer, Singapore-based vice president with energy market analysts Argus Media.
"There is no sign of any economic recovery that will push up oil demand."
US government data released Tuesday confirmed the American economy shrank by 0.5 percent in the third quarter of this year.
The contraction was seen as marking the start of a steep downturn for the United States after it posted gross domestic product (GDP) growth of 2.8 percent in the second quarter.
US data also showed new home sales in the crisis-hit property sector plunged in November to their lowest level since January 1991.
The Organization of the Petroleum Exporting Countries, which produces about 40 percent of the world's crude, agreed last week to cut output by 2.2 million barrels per day to shore up the market. However, prices continued to plunge.
Analysts noted that the recent rise in oil stocks in the United States caused New York prices to fall below their Brent counterpart in London, which is unusual.
Oil reserves in Cushing, Oklahoma, where light, sweet crude oil is stored, are at maximum capacity.
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