Oil falls: Dismal US GDP data
Oil pulled down by dismal US GDP data
Oil prices fell to settle at $44, pulled lower by US data showing the economy of the world's largest energy consumer shrank more than expected in the final three months of last year.
US crude fell 46 cents to settle at $44.76 a barrel after touching a session low of $42.55, reversing a three-day rally.
London Brent crude fell 41 cents to $46.10 a barrel.
The losses came after government data showed US gross domestic product shrank 6.2% in the fourth quarter versus a year earlier, marking the deepest slide since 1982 and outpacing analyst forecasts for a 5.4% contraction.
"Oil markets are reverting back to economic concerns," said Tom Bentz, AN analyst at BNP Commodity Futures Inc.
Global economic weakness has driven a slump of more than $100 in crude prices since July's peaks as the economic crisis cuts into fuel demand from businesses and consumers.
Adding downward pressure to oil prices today, the US Energy Information Administration said that American energy demand fell last year to the lowest level in a decade.
The slide in crude prices has drawn a dramatic reaction from Opec, which has agreed to cut some 4.2 million barrels per day of output and is considering deeper cuts when it meets in March.
Geneva-based consultant Petrologistics, which tracks Opec supply, said this week Opec was on schedule to deliver 89% compliance with the production cuts by the end of February.
The US Department of Energy said today that it hopes Opec will consider the "global economic situation" when it reviews its output policy 15 March in Vienna.
One analyst added Friday that a US investigation of the US Oil Fund for a big trade it made in early February was also playing into the market's losses.
USO sold a large number of front-month crude futures contracts on 6 February and bought second-month contracts -- a trade known as a roll -- and several market participants said the move had a significant impact on prices.
"The CFTC's investigation of US Oil Fund could put pressure on WTI (US crude), because the positions it had in the market were very large," said Oliver Jakob, an analyst at Petromatrix.
Oil prices had rallied earlier in the week after the EIA reported a steep drawdown of 3.4 million barrels in US gasoline stockpiles due to slower imports and rising demand.