Oil prices extended a five-day slide on Friday, bringing this week's declines to about 9 per cent, as swelling US crude stockpiles triggered speculative selling.
US light crude settled down 79 cents to $53.32 a barrel, adding to losses since the price struck a record on Monday at $58.28. London's
Brent crude was down $1.15 at $52.89 a barrel.
This week's declines accelerated after a US government report Wednesday showed domestic crude stocks in the world's No. 1 energy consuming nation at their highest since June 2002, when oil prices were around $20 a barrel.
Petrol stockpiles in the United States, which take the market's spotlight in the run-up to the summer driving season, are also running at a solid year-on-year surplus despite recent weekly declines that pulled them from a six-year high.
"With a solid uptrend in stocks, high Opec production and seasonal demand about to step lower, the intermediate-term fundamentals certainly favor the bears," said Tim Evans, an analyst at IFR Energy Services.
A strengthening dollar -- which on Friday neared a two-month high against the euro -- also helped spur selling from big-money investment funds.
Dollar weakness over the last year has encouraged funds to switch from treasury to commodity markets, as well as insulating many non-dollar economies from the impact of rising dollar-denominated oil prices.
Crude prices are still up around 24 per cent this year -- spurred by concerns that rapidly rising energy demand in Asia's emerging economies could outpace growth in supply -- and many are predicting they will continue to climb in the longer term.
"While rising oil inventories and high levels of speculative interest point to near-term downside in the oil price, we see a sustainable $60 a barrel as very attainable, " Morgan Stanley said in a report on Friday.
Last week Goldman Sachs said oil could eventually spike above $100 as global demand strains capacity, which pushed the market to a record $58.28 on Monday.
The International Monetary Fund said in a report on Thursday the oil market would remain tight in coming years and that high and volatile prices would present a serious risk to the global economy.
Raghuram Rajan, the IMF's chief economist, said prices of $100 a barrel were possible but not necessarily the most likely scenario.
The Organisation of the Petroleum Exporting Countries raised output limits by 500,000 barrels per day (bpd) last month to 27.5 million bpd in a bid to cool prices.
Top world oil exporter Saudi Arabia has said it wants to help build up world stockpiles in time for an expected fourth-quarter surge in demand.
Opec left room for a second 500,000 bpd increase before a June meeting if prices failed to drop below $55.
The group began talks on the second increase last weekend and said then it could decide within two weeks, but it was unclear if Opec would still press ahead with another boost after prices dropped below the $55 threshold on Thursday.
- REUTERS
Oil prices extended a five-day slide on Friday, bringing this week's declines to about 9 per cent, as swelling US crude stockpiles triggered speculative selling.
US light crude settled down 79 cents to $53.32 a barrel, adding to losses since the price struck a record on Monday at $58.28. London's
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