Oil falls toward $56, heads for biggest annual drop since 2008

Oil dropped toward $56 a barrel on Wednesday and was heading for its biggest annual decline since 2008, reuters.com reports.

Global benchmark Brent crude has fallen 49 percent in 2014 as demand growth slowed, the United States expanded output and OPEC, dropping its strategy of trimming supply to keep oil around $100 a barrel, chose instead to defend market share.

On Wednesday, prices came under further pressure from a survey showing China’s factory sector shrank for the first time in seven months in December – a bearish indication on the strength of oil demand in the world’s second-largest consumer.

Brent was down $1.42 at $56.48 by 5.35 a.m., after dropping as low as $56.27, its lowest since May 2009. U.S. crude was down 86 cents at $53.26.

The annual decline for Brent is set to be the biggest since 2008, when demand crumbled in response to the financial crisis.

www.belsat.eu/en, following Reuters

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