Oil prices slumped 3.4 percent on Friday as Opec signalled it would keep output unchanged at its meeting this weekend despite growing stockpile levels in the United States at the height of winter. US light crude fell $1.66 to $47.18 a barrel, while London IPE Brent futures slid $1.49 to $44.95 a barrel. Ministers from the Organisation of Petroleum Exporting Countries, who control about 40 percent of world oil exports, said they were unlikely to agree to any change in the group's crude oil output at Sunday's meeting in Vienna.
Several ministers have said that a cut in output cannot be justified due to the current strong price of oil, which came within reach of $50 a barrel this week.
A supply reduction had been considered to prevent stocks building too quickly this spring when demand typically falls with the end of the Northern Hemisphere winter.
Supplies of crude oil in the United States, the world's largest energy market, have already been on the increase, rising to a nine percent surplus over last year, according to government data.
Adding to pressure, a severe cold spell that has been firing up furnaces in the US Northeast for the past two weeks is forecast to lift this weekend, taking strain off of heating fuel inventories.
Forecasters said near-normal temperatures will return to the region on the weekend while longer-term outlooks predict a warmer-than-normal February and March.
Saudi Arabia's Oil Minister Ali Al-Naimi said on Thursday that Opec could afford to wait at least until March before reducing supply to avert a slide in prices, a sentiment since echoed by other ministers.
The current output ceiling for Opec members with quotas is 27 million barrels per day (bpd).
Algeria's Oil Minister Chakib Khelil said strong oil prices and high inventory levels meant that current oil market conditions suited both producers and consumers.
"Lights are flashing green for the market," he said. "Prices are good, stocks are high, speculators are back. Supply is more than demand, what else do you want?"
He said $50 oil did not appear to be impacting the global economy, mirroring comments from Libya's oil minister.
Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said on Friday he thought Opec's official price target of $22-$28 for a basket of their crudes was obsolete and that he favoured a new target of $32-$35.
Oil prices remained supported by concern that militants in Iraq may attack oil infrastructure as the country goes to the ballot box for the first time since the US led invasion of the country in April 2003.
Attacks on Iraq's oil installations limited the country's exports for over a month.
The flow of crude from Iraq's northern oilfields through the pipeline to Turkey was paralysed by an attack on December 18, and attacks since then have prevented the line reopening.