LONDON: Oil prices fell sharply on Friday in line with global stock markets, giving up most of the gains made the previous day when Russia Light sweet crude for delivery in January dropped 3.47 dollars to 44.51 dollars a barrel on the New York Mercantile Exchange (NYMEX).
On London's InterContinental Exchange (ICE), Brent North Sea crude for January slid 2.90 dollars to 44.49 dollars. Oil prices had soared 10 percent on Thursday.
"Crude futures tracked equity markets lower" on Friday, said Nimit Khamar, analyst at Sucden brokers.
"Risk aversion set in after the auto industry bailout hit a snag."
A plan worth billions to rescue ailing US automakers collapsed in the US Senate overnight, raising the prospect of imminent bankruptcy for General Motors and Chrysler with millions of jobs at stake.
The news weighed heavily on global stock markets Friday, in turn depressing commodity prices.
The Organization of Petroleum Exporting Countries (OPEC) is meanwhile widely expected to announce a cut in production at a meeting next Wednesday in a bid to bolster prices that have plunged from record highs above 147 dollars in July.
OPEC, which pumps 40 percent of world crude, has called on non-members to play a role in reducing output to stem the sharp slide in crude prices of the last five months.
Russia on Thursday appeared to heed the calls, saying it was ready to join forces with OPEC to stem the plunge in prices and could even become part of the oil cartel if membership were in Moscow's interests.
Russia ranks alongside Saudi Arabia, de facto leader of OPEC, as the world's largest oil exporter.
Also on Thursday, the International Energy Agency's (IEA) forecast that global oil demand would fall this year for the first time since 1983 owing to a worldwide economic slowdown.
Oil prices had a week ago plunged below 40 dollars to their lowest levels in nearly four years as worse-than-expected jobs data in the United States raised the prospect of severe falls in energy demand.
Prices began 2008 by vaulting above 100 dollars for the first time, lifted by strong energy demand from emerging economic powers China and India and by political unrest in major crude exporters Iran and Nigeria.
