Oil prices continue to edge downwards after New York trading eased last night following a report showing higher-than-expected supply.
Distillate fuel stockpiles, which include heating oil, fell as expected due to cold weather in the US northeast, the world's largest heating oil market.
US light crude fell as much as 3.5 per cent, to a low of $47.90 per barrel before bouncing back to end at $48.78 a barrel, down 86 cents, or nearly 2 per cent.
London Brent fell 45 cents at $46.51 a barrel, after hitting a three-month peak at $47 earlier and striking a low for the day at $45.60.
US commercial crude supplies rose 3.4 million barrels last week due to an increase in import levels. The rise is more than twice what market analysts had forecast. US crude supply now stands about 9 per cent more than year-ago levels.
Although the price is falling, crude oil is still near $50 as traders watch violence in Iraq and await an OPEC meeting this weekend in Vienna. Some in OPEC are signaling that any change in production quotas can wait until March.