Oil prices slipped below $65 a barrel yesterday in Asia amid renewed concerns about the severity of a global economic slowdown which triggered an exodus from stocks and commodities.##m:[Read more]##
Light, sweet crude for December delivery pared earlier losses and was down 53 cents to $64.77 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore.
Oil prices have fallen by about 56 per cent since peaking at $147.27 a barrel in mid-July.
In London, December Brent crude fell 33 cents to $61.57 on the ICE Futures exchange.
Oil prices overnight fell $5.23 to settle at $65.30 on news of rising US gasoline inventories.
For the week ended October 31, gasoline inventories rose by 1.1 million barrels, or 0.6 per cent, which is 1.3 per cent below year-earlier levels, the Energy Department's Energy Information Administration said in its weekly report.
Analysts expected stockpiles of the motor fuel to fall by 1.1 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Demand for gasoline over the four weeks and ended Oct. 31 was 2.3 per cent lower than a year earlier, the report said.
Crude-oil inventories remained at 311.9 million barrels, 1.5 per cent above year-ago levels. Analysts had expected a boost of 500,000 barrels.
Oil prices will likely see more large swings as investors struggle to gauge the severity of the global economic downturn, Rigby said.
"It's amazing how volatile the market is. It's trying to find its equilibrium," Rigby said. "The reaction to news is extreme."
Prices rose $6.62 a barrel last Tuesday on speculation the Organisation Petroleum Exporting Countries (OPEC) may cut production at its next meeting in December.
OPEC last month said it would cut output quotas by 1.5 million barrels a day in addition to a 520,000 barrel cut announced earlier.
"$60 a barrel seems to be a strong psychological floor price, especially for OPEC," Rigby said.
"The market is looking to see just how much those cuts impact supply."
In other Nymex trading, gasoline futures rose 1.06 cents to $1.435 a gallon. Heating oil dropped 0.24 cent to $2.0523 a gallon while natural gas for December delivery rose 3.3 cents to fetch $7.282 per 1,000 cubic feet.