LONDON – Oil sank toward $57 on Friday after touching the lowest level since July as swelling fuel stocks eased consumer fears of tight winter supplies.
U.S. light crude oil was down 14 cents at $57.66 a barrel at 1335 GMT, off a session low of $56.93, the weakest since July 21.
London Brent was off 23 cents at $55.45 a barrel.
U.S. oil prices have lost around $3, or five percent, since the start of the week, and are $13 below a late-August record of $70.85 touched in the wake of hurricane damage.
On Thursday they fell below a key technical indicator, the 200-day moving average, for the first time since 2002. Analysts said that could trigger a deeper selloff by funds who base decisions to buy or sell on chart analysis.
"The gap lower below the 200-day moving average is noteworthy since the market has not been below this.... since 2002," said Phil Roberts of Barclays Capital.
The market has also been weakened by signs of slower oil demand growth, rising stocks and mild weather.
Prices are still up around a third since the start of the year and more bullish analysts say there could be a strong rally if sudden cold temperatures spur fourth quarter demand.
Further fuelling the bulls, the U.S. Treasury Department said lower gasoline prices in early November and an improving jobs market had helped to bolster U.S. consumer sentiment.
But in the immediate term, oil stocks are higher than the same time a year ago in the United States and Europe and the Organization of the Petroleum Exporting Countries has said there were no takers for an extra two million barrels per day of crude it has volunteered if needed.
"No one took it and that means there is no demand and that is also showing in the dropping price of oil," Qatari Oil Minister Abdullah al-Attiyah said on Friday.
The cartel next meets on December 12 in Kuwait to reconsider its output policy.
OPEC's reference crude basket price dropped to $51.30 on Thursday, the latest available number, only just above the $50 a barrel level that OPEC ministers have said they would seek to defend.
(Additional reporting by Neil Chatterjee and Odai Sirri)