Energy shares lead Asian stock losses as oil falls under $45

"Opec has been looking down the barrel so to speak, of resurgent supply from Nigeria and Libya amongst Opec and of course, American shale which combined have completely offset the 1.8 million barrel per day production cut agreement", said Jeffrey Halley, senior market analyst at OANDA, in a note.

Futures have collapsed 11 percent this week, slumping to the lowest since November 15 - two weeks before the Organization of Petroleum Exporting Countries agreed to production curbs to boost prices and ease a global glut.

This has now become a sign that OPEC and other producing countries are not taking serious measures to reduce the world's excessive amount of crude. However, they likely will, which could cause a short-term pop.

The US data and some investors "losing faith with Opec" are not helping the oil price, said Abhishek Deshpande, an oil analyst at Natixis.

-West Texas Intermediate oil fell 4.8 percent to settle at $45.52 a barrel.

They had to duck for cover overnight as both Brent and USA crude prices fell more than 3 per cent to below US$47 a barrel at one stage on mounting concerns about global oversupply.

Front-month Brent crude trading volume rose to the highest on record with almost 525,000 lots changing hands, according to Reuters data that extends back to 1988.

The weak energy sector is dovetailing with notable declines in other raw materials, amid worries about waning demand from China as Beijing's attempts to damp speculation leads to squeezed liquidity amid a rise in short-term borrowing costs to two-year highs.

They also pointed to higher-than-expected USA oil production.

There was also a sign of slowing energy demand in China, the world's second largest oil consumer, when a survey showed growth in that country's services sector in April was at its slowest in nearly a year. On the plus side, hedge funds and other money managers have reduced their bullish bets on crude oil, which is to say, they are not overextended on the upside in the way that they were the last time oil prices fell. Rogers said charts showed the next potential stalling points were $44.20 for WTI and $47.20 for Brent. This level is close to the output of Russian Federation and Saudi Arabia.

The June crude contract was down $1.44 at US$46.38 per barrel and the June natural gas contract was down three cents at US$3.20 per mmBTU.

Crude fell 26 cents to $45.26 a barrel after falling as low as $43.76 in Asian trading, a level that wiped out all gains since the production cut agreement in November.

Crude output has surged in the United States, with increasing rig counts for the past 11 months.

Russia's Energy Minister, Alexander Novak, said in written comments on Thursday that his country is inclined to extend its cuts.

"At some point, the market should recognize Opec isn't the most important player in the market any more", said Commerzbank's Eugen Weinberg, "That is non-Opec, and, above all, USA shale".

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