Front month February Brent closed down US$0.82 to US$29.35 a barrel Friday in pit trade on London's International Petroleum Exchange.
Brokers said the losses were exaggerated by thin volumes, and some upside is expected Monday.
A moderate fall in prices Friday was expected, as the IPE moved in line with New York Mercantile Exchange crude and product futures which fell on US inventory data released Wednesday.
Crude oil stocks declined 3.8 million barrels last week to 270.7 million barrels, a larger-than-expected draw. That leaves inventories just 700,000 barrels above the 270 million barrel mark -- a level identified by the National Petroleum Council as tight for US crude storage.
Some analysts said the market's reaction to this has been muted, and that there could be further upside next week once more traders are back at their desks.
The February light, sweet crude contract on Nymex closed down US$0.27 at US$32.52 per barrel Wednesday. Nymex was closed Friday.
Nymex crude sold off Wednesday on bearish products data, despite bullish crude data.
Once the year's trading gets underway next week, the focus will again turn to the OPEC ahead of their next meeting in February.
By next week the group's basket price of seven crudes will have traded above US$28 per barrel for more than 20 trading days. OPEC has set US$28 per barrel as the upper limit for its basket price, pledging to raise output by 500,000 barrels a day if the basket price holds above US$28 per barrel for 20 consecutive trading days.
However, recent comments from OPEC ministers indicate that the group is not preparing to raise output, and the talk at the February meeting is more likely to be about whether or not to cut production.
Meanwhile, the battle for a Russian oil pipeline contract has been heating up.
For now, Krylova Cape is not much to see: a spit of land between the Russian taiga forest and the Sea of Japan, its soil being graded a bit by a bright yellow bulldozer. But what is taking shape here is central to a pitched struggle between the two most important economies in Asia: The reigning titan, Japan, and its rising challenger, China.
Both economies are hungry for raw materials, especially energy: Japan because it has almost none of its own; China because its economic boom has fast outstripped what once were adequate domestic supplies. Both want to limit their dependence on oil from distant, politically volatile regions like the Middle East. And both see an attractive alternative in the little-tapped energy riches of the vast, vacant Russian Far East.
Getting oil to market from the remote East Siberian fields that Russia is ready to develop means spending billions on a pipeline. Japan and China are fighting hard over where that pipeline will go: Either to China's northeastern industrial heartland, or to this stretch of Russian shoreline, where a new deep-water oil terminal will be just one day's tanker cruise from Japan.
With the choice Russia faces, the political and economic dynamics of Northeast Asia stand to be profoundly shaped for years to come.
"The Chinese will be furious if the Russians do not give them the pipeline," said Graham Hutchings, an Asian specialist with the British consulting group Oxford Analytica. And no one expects it to be the last time Japan and China collide over the resources they both need.
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