Oil falls back below $39 a barrel

US light, sweet crude for February delivery fell to $38.53 a barrel in electronic trading on Nymex.

Data on Tuesday showed that US new home sales had fallen to a near 18-year low in November.

Bad economic data in the US has been making traders worry about how much the demand for oil will fall in the world's biggest economy.

Attention now turns to the weekly inventories figures from the US Energy Department, which are due out later on Wednesday.

The inventories figures give an indication of how much consumption of oil has declined.

Oil prices have fallen 74% from their peaks in July.