Oil fell toward $55 a barrel on Friday, taking losses to nearly 10 percent this week on mild weather and rising U.S. fuel inventories, Reuters reported. Warm winter conditions in the U.S. Northeast, the world's top heating oil market, have curbed heating fuel demand and knocked prices to their lowest level in 18 months. Concern about a U.S. economic slowdown has also triggered losses. U.S. crude CLc1 was down 27 cents to $55.32 a barrel by 1645 GMT. London Brent crude LCOc1 fell 27 cents to $54.84 after dropping by $2.85 on Thursday. The drop in U.S. crude by $2.73 on both Wednesday and Thursday marked the biggest two-day percentage slide since December 2004 and took the market to its lowest settlement since June 15, 2005. Besides mild weather, rising fuel inventories in the United States have also pressured prices. Stocks of distillates, which include heating oil, rose by 2 million barrels last week, a government report showed on Thursday. EIA/S Gasoline stocks rose by 5.6 million barrels, more than expected. The price slide also raised speculation that a hedge fund may be taking large losses on an oil position, similar to the natural gas bet that sank the multibillion-dollar Amaranth fund in 2006.
