The price of oil fell for the fifth straight day on Friday, ending the week about US$4 per barrel lower than it began. The selloff was triggered by a sharp drop in gasoline futures, which posted an 11 percent decline on the week as government data pointed to increased activity by refiners and rising supplies of crude oil.
"This is a long overdue correction," said Mike Fitzpatrick, a broker at Fimat USA Inc in New York.
Light, sweet crude for May delivery fell US$0.79 to settle at US$53.32 a barrel on the New York Mercantile Exchange. Crude futures settled at a record US$57.27 last Friday and reached an intraday record above US$58 a barrel on Monday.
In London, Brent futures declined by US$0.91 cents to settle at US$52.90 a barrel on the International Petroleum Exchange.
Gasoline futures dropped by US$0.0314 cents to US$1.5366 per gallon and are now US$0.19 below last week's peak settlement. Still, the retail price of regular unleaded averages US$2.22 a gallon, up US$0.44 from a year ago.
In other Nymex trading, heating oil futures declined by US$0.0311 to US$1.4972 per gallon and natural gas futures fell by US$0.124 to US$7.242 per 1,000 cubic feet.
The market's downward momentum picked up steam on Wednesday when the US Energy Department released data that showed the nation's refiners cranked up production last week to nearly 94 percent of capacity and that the country's gasoline stockpiles, which fell for the fifth week in a row, remained 5.7 percent higher than a year ago.
The agency also said the nation's inventory of crude oil was 8 percent higher than last year. It was the eighth consecutive week in which crude inventories rose.
Andy Xie, an economist for Morgan Stanley Asia in Hong Kong, said he believes recent comments from US Federal Reserve Chairman Alan Greenspan also had a hand in pushing crude prices down.
"The most important thing is that a policy-maker is publicly talking about the prices," he said. "This will have a serious impact on the oil market."
Greenspan had said Tuesday that rising oil inventories may "damp the current price frenzy."
"Much will depend on the response of demand to price over the longer run," Greenspan said. "If history is any guide, should higher prices persist, energy use will over time continue to decline, relative to GDP."
Analysts said this week's selloff does not mean the oil price rally is over.
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