Updated from 3:05 a.m. EST
Crude oil prices fell again Friday, having already lost 12% in the prior two sessions, as the bottom appeared to fall out of the yearlong bull market.
The January futures contract closed 71 cents lower at $42.54 in Nymex floor trading, amid receeding worries about short-term supply.
The two-day selloff is the biggest since the Persian Gulf War in 1991 and puts prices some 22% below their record closing high of $55.17 touched in late October.
Weekly inventory data showing another large increase in crude oil, gasoline and heating oil stocks started the selloff Wednesday. In addition, a National Weather Service forecast calling for unseasonably warm temperatures in the coming week also pressured prices.
Oil cartel OPEC meets Dec. 12 in Cairo, where some members are expected to press for a cartel in production to head off any possible collapse in prices, which last happened in the late 1990s.
Prices enjoyed a seemingly relentless rally for most of 2004 as traders worried about several sources of possible and actual supply disruption amid unusually strong global demand.
The recent correction, however, may not be as definitive as it seems; prices suffered a sharp reversal in July, only to battle back and hit new highs in August.