LONDON, Dec 7: World oil prices tumbled by more than $1.50 on Friday as concerns resurfaced that slower US economic growth could dampen crude demand, traders said. In London on Friday, Brent North Sea crude for January delivery plunged $1.56 to $88.62 per barrel.

New York’s main contract, light sweet crude for January delivery, dived $1.73 to $88.50 a barrel.

Since striking recent record highs close to $100, crude prices have lost more than 10 per cent in value in extremely choppy trading.

“It’s hard to get a feel for this market at the moment, it’s been very volatile,” said Sucden trader Rob Montefusco.

“Every time it’s jumping above $90 we’re seeing some follow through selling. There’s nothing fundamental to justify these moves, it’s mainly technical trading.”

Oil market experts argue that prices are being supported by tight supplies of winter fuel during the peak-demand northern hemisphere winter. At the same time, they add that there are widespread fears of a US-led global economic slowdown that could dampen demand for energy.

This week was punctuated by two major events in the oil market.

On Wednesday, prices initially spiked in reaction to a decision by Opec to leave its daily crude output quota unchanged at 27.25 million barrels at a crucial meeting in Abu Dhabi, but they later fell back.

The Organisation of Petroleum Exporting Countries is a powerful player in the oil market because it pumps about 40 percent of the world’s crude supplies.

There was muted reaction to a bigger-than-expected drop in US crude reserves that was also revealed on Wednesday.

The US Department of Energy said US crude inventories had plunged by 8.0m barrels in the week ending Nov 30. That was far more than market expectations for a drop of 1.25mn barrels.

The United States — the world’s biggest energy consumer — has called on Opec to pump more crude to cool oil prices that surged to record high levels near $100 a barrel last month.

The Opec cartel insists it has no control over prices and that the market rally seen during much of the year does not reflect supply and demand fundamentals.

Traders said prices were also lowered by the strengthening US currency. A stronger dollar discourages demand for dollar-priced goods, such as crude oil, for buyers using weaker currencies. —AFP