Oil prices fell to 42.01 dollars a barrel in trading here on Friday, the lowest level since January 2005, and were expected to slide further in the days ahead as energy demand wanes, analysts said.

Later on London's InterContinental Exchange (ICE), Brent recovered to stand at 42.96 dollars, up 68 cents from Thursday's close.

Light sweet crude for January climbed 70 cents to 44.37 dollars a barrel on the New York Mercantile Exchange (NYMEX).

It is "way, way premature" to think that the market has hit bottom, said David Moore, a commodities strategist with the Commonwealth Bank of Australia.

"The focus is well and truly on the weakness in consumption, and that doesn't seem likely to go away in the next 24 hours."

Moore said Friday's US employment report could re-emphasise the focus on bad economic news and resultant lower demand for energy.

The key November non-farm payrolls and unemployment report is expected to show the loss of 325,000 jobs in the United States, the world's largest economy and biggest energy consumer.

The US, European Union, Japan and other economies are already in recession, and investors are worried about an increasingly marked decline in demand among the industrialised countries, and a slowdown in emerging countries such as China.

Oil prices have fallen by more than two thirds since reaching record high points above 147 dollars in July, pulled down by a widening global economic slowdown that weighs on demand.

Opec president Chakib Khelil said on Wednesday that there was no "floor" for the price of oil.

Oil prices meanwhile began the week sharply lower after the Organization of Petroleum Exporting Countries (Opec) decided at a weekend meeting against cutting production, preferring to wait until December before reducing crude exports.

The cartel's secretary general, Abdalla Salem El-Badri, said on Monday that Opec would decide on a "major" output cut next month if the oil market were deemed to be deteriorating.

Opec, which pumps 40 percent of the world's crude, met in Cairo on Saturday to assess the state of the oil market but held off from making any decision on cutting production.

Instead, energy ministers decided that any output move would be made when they next meet in Oran, Algeria on December 17.

Opec has already slashed output twice this year by a total of two million barrels per day (bpd) in response to plunging prices but fears remain that a global recession will drain demand for energy.

The Opec production cuts agreed in September and October failed to stop prices sliding under 50 dollars earlier this month as concern mounted about a global recession.