Crude oil prices slide
Posted: 26 November 2009 2301 hrs

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LONDON: World oil prices slumped on Thursday in line with equity markets and following a strong rally the previous day.

New York's main contract, light sweet crude for January delivery, retreated 1.80 dollars to 76.16 dollars a barrel.

Brent North Sea crude for January delivery sank 1.42 dollars to 77.02 dollars a barrel in late London deals.

Global equities plunged on Thursday, with Europe down three percent after Dubai's shock call to suspend the debt of a key state company fuelled anxiety about excessive public borrowing, analysts said.

US markets were shut on Thursday for Thanksgiving.

Crude futures meanwhile slid one day after surging on US economic data that signalled a possible upturn in demand for energy in the United States - the world's biggest oil-consuming nation.

Fresh US data showed jobless claims fell in the week ending November 21 to an adjusted 466,000, the lowest amount since September 2008.

A separate report showed consumer spending rose more than expected in October, and a third said sales of new homes rose at their strongest pace since September 2008.

"The overwhelming (market) sentiment was based on the economic news," said Andy Lipow, analyst at Lipow Oil Associates.

Crude futures dropped on Thursday also as investors digested the weekly oil data from the US Department of Energy (DoE).

"The inventory numbers were uninspiring so there was not anything to drive the market higher," said oil market analyst Jason Feer at energy consultants Argus Media.

The DoE on Wednesday reported that US crude stockpiles rose by one million barrels in the week ended November 20, while gasoline reserves climbed by the same amount.

However distillate stockpiles dropped by 500,000 barrels last week, while analysts had expected a rise of 500,000 barrels.

Distillates include heating fuel, which is traditionally in high demand at this time of year in the northern hemisphere winter.

Crude oil won support on Wednesday also from the weak greenback, which makes dollar-denominated raw materials cheaper for buyers using other currencies, boosting demand and eventually prices.

Also on Wednesday, OPEC member Algeria said the oil cartel was likely to maintain its production levels when the organisation meets next month in Angola.

The Organisation of the Petroleum Exporting Countries (OPEC) supplies 40 percent of the world's crude. - AFP/de