Oil prices slide as concerns about global economy, oversupply weigh

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Brent crude, the worldwide standard, dropped by approximately one percent to $53.92 per barrel in the early morning as the heightened concerns over the increased supply of oil and poor global economic conditions helped relieve the upward pressure that is experienced from the stock market. On Monday, the USA benchmark crude fell more than 7 percent before jumping more than 10 percent on Wednesday.

Global stocks rebounded on Wednesday after the Trump administration's attempt to shore up investor confidence and a report on strong United States holiday spending.

Brent and WTI have lost more than a third of their value since the beginning of October and are heading for declines of more than 20 per cent in 2018.

Crude's recent sell-off is a grim reminder that OPEC's management of the oil market isn't foolproof.

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Brent for February settlement rose US$0.04 in its last trading session before expiry, closing at US$52.20 a barrel on London's ICE Futures Europe exchange, down 3.2 percent for the week.

A day after the American Petroleum Institute pressured already stressed oil prices further with an unexpected inventory build, the Energy Information Administration reported instead that crude oil inventories were virtually unchanged for the week.

USA crude inventories were down by 46,000 barrels in the week to December 21, the Energy Information Administration said, a smaller draw than the 2.9 million barrels analysts polled by Reuters had expected.

USA crude stocks fell modestly last week, while gasoline stocks increased more than expected, Energy Information Administration data showed on Friday. Analysts had expected a decrease of 2.9 million barrels. US West Texas Intermediate (WTI) crude futures fell US$1.61 to settle at US$44.61 a barrel, down 3.48 per cent.

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The United States has emerged as the world's biggest crude producer this year, pumping 11.6 million barrels per day (bpd), more than both Saudi Arabia and Russian Federation.

Meanwhile, Russian Energy Minister Alexander Novak said on Thursday that rising protectionism and the unpredictability of the US administration had greatly contributed to global oil price volatility over the past two years. They rose 8 percent to $54.47 a barrel the day before.

Novak also told reporters the USA decision to allow some countries to trade Iranian oil after putting Tehran under sanctions was one of the key factors behind the OPEC deal.

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