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New York - Oil prices skidded sharply lower in volatile trade on Thursday, pushing the US benchmark futures contract to a new five-year low amid concerns about ample global supplies.
West Texas Intermediate (WTI) for January delivery tumbled $2.36 to finish at $54.11 a barrel on the New York Mercantile Exchange. That was the lowest price since early May 2009.
The international benchmark, Brent North Sea crude for February delivery, settled at $59.27 a barrel in London, down $1.91 from Wednesday's closing level.
The key US WTI contract had edged higher at the opening of the session - supported by Wednesday's official report showing US crude inventories fell last week - but then began to fall and accelerated its losses in the last hour of trade.
"We see a lot of volatility and this volatility seems bound to last until the end of the year, with not much happening, fundamentally," said Carl Larry of Frost & Sullivan.
"It's a lot of holiday trade now," he said, with traders looking in the rearview mirror at important US macroeconomic events: the November jobs report last Friday and the Federal Reserve policy decision Wednesday.
Fed chair Janet Yellen, in a press conference on Wednesday following a two-day monetary policy meeting, said the dramatic decline in global oil prices was good for the US economy, a net importer of oil, as consumers gain extra dollars to boost spending.
Oil prices have plunged from June levels above $100 a barrel, and Opec, the oil producers group that supplies about 40% of the world's crude oil, has declined to cut output.
Saudi Arabia, the leading Opec producer, said on Thursday that competitive pressures prevent it from reducing output, and the kingdom can weather plunging oil prices.
"It is difficult, or even impossible, for Saudi Arabia or Opec to undertake any measure that would lead to a reduction in (their) share of the market and an increase in that of others" who do not belong to the cartel, Oil Minister Ali al-Nuaimi told the official Saudi Press Agency.
Tim Evans of Citi Futures said Nuaimi's comments were seen by some as an unwillingness to give up market share that suggested "a commitment to maintaining production regardless of the drop in price or the projected 2015 supply/demand surplus."
