INSUBCONTINENT EXCLUSIVE:
back towards their lowest levels for more than a year on worries about oversupply and the outlook for energy demand as stock markets tumbled
for additional hikes over the next two years, dashing investor hopes for a more dovish policy outlook.US light crude oil fell $1.61 a
barrel, or 3.3 per cent, to a low of $46.56 and was trading around $46.70 by 0845 GMT
North Sea Brent was down $1.60, or 2.8 per cent, at $55.64 a barrel.Both major oil futures contracts rallied sharply on Wednesday but are
now at or close to their lowest levels for over 14 months, more than 30 per cent below multi-year highs reached at the beginning of
October."Wednesday's recovery was short-covering," said Xi Jiarui, chief oil analyst at consultancy JLC."Investors quickly moved their
attention to deteriorating fundamentals in the oil markets including more signs of slowing economic growth next year, record production and
the lack of confidence with OPEC's pledge to curb production."The Organization of the Petroleum Exporting Countries and other oil producers
including Russia agreed this month to curb output by 1.2 million barrels per day (bpd) in an attempt to drain tanks and boost prices.But the
cuts will not happen until next month and production has been at or near record highs in the United States, Russia and Saudi Arabia.Saudi
Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market
remained vulnerable to political and economic factors as well as speculation.Technical analysis showed US oil may retest support at $45.94
the decrease of 2.4 million barrels analysts had expected.Distillate stockpiles, which include diesel and heating oil, dropped by 4.2
million barrels, the EIA said, versus expectations of a 573,000-barrel increase.Distillate demand rose to the highest since January 2003,
which bolstered buying, particularly in heating oil futures, the market's proxy for diesel.
