Oil prices crumbled to an 11-week low near $43 a barrel today, suffering the biggest 2-day slide since the Gulf War after an increase in US heating oil stocks triggered heavy selling from big-money speculative funds.
US crude oil futures fell $2.34 a barrel, or 5.1 per cent to $43.15, the lowest level since mid-September, while London Brent was down $2.31 at $40.00.
US prices plunged $3.64, or 7.4 per cent yesterday, and the combined fall over the two sessions is the steepest since 1990 according to Reuters figures.
Prices are now more than $13 below their October all-time high, although still 30 per cent up from the start of the year.
The International Energy Agency (IEA) hopes OPEC oil producers will exercise caution on output policy at next week's meeting and allow world oil stocks to keep building, IEA chief Mr Claude Mandil said today.
"I hope OPEC will be wise and let stocks rebuild to adequate levels. They have proved to be wise in the past months," Mr Mandil said.
Oil prices have fallen to their lowest level since mid-September after plunging more than 7 per cent yesterday following a build in US stocks of winter heating fuel.
Prices are more than $11 below their October all-time high, although still 37 per cent up from the start of the year.Stocks are building in consuming countries as OPEC pumps at the highest level in 25 years.
The Organisation of the Petroleum Exporting Countries will allow members to continue pumping above their quotas in the first quarter next year if oil prices stay high, the group's president said today.