Oil prices eased again early on Wednesday, hovering around $46 a barrel ahead of weekly US data expected to show fuel stocks rising in time for winter. US light crude futures were trading down 11 cents at $46 a barrel, having racked up losses totalling nearly $3 in the last four sessions. Prices have collapsed more than 17 percent since late-October's record high $55.67 a barrel. London Brent crude was down 14 cents at $42.15.
Full-tilt Opec production and slowing global demand growth have helped replenish consumers' inventories, prompting speculative funds to shift money out of oil following a rally this year that drove prices up 70 percent at their height.
A steady climb in crude stocks in the United States, the world's largest energy market, calmed traders fears of a supply squeeze during the northern hemisphere winter.
Supplies have risen 22 million barrels in the past seven weeks, thanks also to recovering US Gulf of Mexico output, and are expected to climb again by 1.4 million barrels in weekly government data.
Analysts also forecast distillate stocks, including heating oil, would climb by 700,000 barrels, narrowing a significant deficit on the same period a year ago.
Despite hefty crude supplies, low stocks of heating oil in the big consuming markets of the United States, Germany, and Japan are keeping the market on edge, dealers say.
Japanese kerosene supplies rose 3.4 percent over the past week, but are still below last year's levels, an industry group reported on Wednesday.
An early or severe winter could stress inventories, prompting a fresh influx of buying from funds, who have cut their net long position in US crude to the lowest level in a year.
But thus far temperatures have been relatively mild.
"The weather's been pretty kind so far, stocks are building, are refiners coming back from maintenance - people are a bit more relaxed about the situation," said David Thurtell, commodity strategist at Commonwealth Bank of Australia.
The rapid price fall is stirring defensive talk from some members of the Opec producers' cartel, which has been partly sidelined this year as most countries pumped all out to try to keep pace with the fastest demand growth in a generation.
Number two producer Iran believes cartel members needs to cut production back to official quota levels to bolster prices for its lower-quality supplies, which have lost value more quickly than other grades, an Iranian official said Tuesday.
"I think Opec would like to see oil below $40 before they give serious thought to cutting back, there's a way to go before that," said Thurtell.
The 10 Opec members with quotas pumped 27.89 million barrels per day (bpd) in October, 890,000 bpd above a ceiling that came into force on November 1, a Reuters survey found.
Opec member Nigeria remained a source of some worry, despite the withdrawal of a strike threat on Monday after the government agreed to reduce domestic fuel prices.