Oil prices slipped further from record highs today as easing concern about winter supplies prompted further profit-taking from big-money hedge funds.
US light crude fell 59 cents to $49.01 a barrel, more than $6.50 below the all-time peak at $55.67 struck on October 25th. London Brent crude was down 52 cents at $45.90 a barrel.
Rising crude and natural gas stockpiles in the United States and signs that high energy costs are hurting economic growth have gradually eroded a rally that had lifted prices more than 50 per cent this year.
As confidence grows over supplies for the northern winter, speculative hedge funds cut their long positions in New York crude oil futures to the lowest levels in a year, the US Commodity Futures Trading Commission said on Friday.
"The longs have made pretty good profits from this market and now they're taking their money out. Maybe the oil story has run its course," said Mr David Thurtell, Sydney-based commodities strategist at Commonwealth Bank of Australia.
Heavy fund buying has helped drive oil's rally this year as poor returns on equity markets and big falls in the dollar's value drew speculators to look for profits in commodities markets instead.
While the dollar fell to a fresh record low against the euro today, this time it is other markets that are seeing fresh buying interest.
Robust growth in oil demand this year has forced producers to pump almost at full throttle, and analysts are now looking for signals as to whether the supply surge is finally bringing prices from their peaks.
A surge in output to more than 30 million bpd by OPEC has helped replenish U.S. crude stocks by 10 million barrels in the past two weeks.
This has allayed supply concerns that have plagued the market since September's Hurricane Ivan, which knocked out more than a quarter of Gulf of Mexico production for weeks.