Oil prices slid toward $60 a barrel in Asian trading this morning to extend the previous day's decline triggered by an unexpected rise in US crude inventories.
Frosty weather in the United States, the prospect of an Opec price cut early next year and a disruption to Abu Dhabi exports all limited losses, keeping year-to-date gains at nearly 40 per cent.
US crude slipped 37 cents to $60.48 a barrel after shedding 52 cents yesterday.
Losses followed a 900,000-barrel rise in US crude stocks in the week to December 9th, when expectations were stocks would decline.
Stocks are 12 per cent higher than they were a year ago and well above their seasonal average.
Gasoline stocks, which have languished below year-ago levels since hurricanes knocked several US Gulf Coast refineries out of service, rose 1.8 million barrels, more than expected.
Heating oil stocks fell as a blast of cold weather raised demand, but inventories are still up 13 per cent over last year.