In another blow, official data on Friday showed that the US economy slowed sharply in the fourth quarter of 2014, sparking fears over demand in the United States, which is the world's biggest oil consumer.

New York crude oil dived on Thursday to USD 43.58 per barrel, striking a nadir last seen on March 12, 2009.

Prices plunged after official data showed Wednesday that US crude stockpiles surged by 8.9 million barrels to 406.7 million in the week to January 23.

The overall level of stockpiles was the highest since the US government began keeping weekly records in 1982.

Meanwhile, data showed today that US gross domestic product (GDP) grew at an annual rate of 2.6 percent in the fourth quarter. That marked a steep decline from the brisk 5.0 percent growth in the third quarter.
"Weaker than expected US GDP numbers reinforce the perception that we are seeing a little bit of a slowdown in the pace of the US recovery," said CMC Markets analyst Michael Hewson.
"With oil storage at record levels this suggests that demand is likely to remain weak, and thus exert further limitations on the ability of the oil price to rebound, suggesting we could well see a gradual move towards the USD 40 level," he warned.

In reaction to the US inventories data, meanwhile, WTI dropped USD 1.78 and Brent lost USD 1.13 on Wednesday.
Sucden analyst Myrto Sokou added that the weekly US energy report "indicated a prolonged deterioration in oil fundamentals" of supply and demand.

The oil market has lost more than half its value since June last year when crude was sitting at more than USD 100 a barrel due to a supply glut, boosted largely by robust US shale oil production, and weak global demand.

The problem was exacerbated in November after the OPEC oil cartel insisted that it would maintain output levels despite plunging prices. The 12-nation group pumps about 30 percent of global crude.

By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in March edged up to USD 49.65 a barrel from USD 49.55 one week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March dipped to USD 45.35 a barrel compared with USD 46.91.

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