Oil prices extended losses to fall below $46 today ahead of weekly US data expected to show fuel stocks rising in time for peak winter demand.
US light crude futures were trading down 25 cents at $45.86 a barrel, extending a five-day losing streak to $3. Prices have collapsed more than 17 per cent since late-October's record high $55.67 a barrel.
London Brent crude was down 39 cents at $41.90. Full-tilt OPEC production and slowing global demand growth have helped replenish consumers' inventories, prompting speculative funds to shift money out of oil following a rally this year that drove prices up 70 per cent at their height.
A steady climb in crude stocks in the United States, the world's largest energy market, calmed traders' fears of a supply squeeze during the northern hemisphere winter.
Supplies have risen 22 million barrels in the past seven weeks, thanks also to recovering US Gulf of Mexico output, and are expected to climb again by 1.4 million barrels in weekly government data due at 3:30 p.m. Irish time.
Despite hefty crude supplies, low stocks of heating oil in the big consuming markets of the United States, Germany, and Japan are keeping the market on edge, dealers say.
An early or severe winter could stress inventories, prompting a fresh influx of buying by funds, who have cut their net long position in US crude to the lowest level in a year. But thus far temperatures have been relatively mild.
The rapid price fall is stirring defensive talk from some members of the OPEC producers' cartel, which has been partly sidelined this year as most countries pumped all out to try to keep pace with the fastest demand growth in a generation.
Number two producer Iran believes cartel members needs to cut production back to official quota levels to bolster prices for its lower-quality supplies, which have lost value more quickly than other grades, an Iranian official said.
OPEC member Nigeria remained a source of some worry, despite the withdrawal of a strike threat on Monday after the government agreed to reduce domestic fuel prices.
A Nigerian warlord who had threatened before to disrupt the country's over 2 million barrels per day of output has pulled out of a peace process with the government, but said he would not resume threats to the industry for the moment.