LONDON (AFP) - Oil prices fell close to 40 dollars a barrel on Friday, having begun the session higher, at the end of a very volatile week for markets. New York's main contract, light sweet crude for delivery in Feb, dropped 80 cents to $40.90. Brent North Sea crude for February shed 43 cents to $44.24 on London's InterContinental Exchange. Oil prices had also fallen Thursday on concerns over a US stockpile buildup and worries that the global economic slump would further dampen demand, traders said. The US Department of Energy said on Wednesday that stockpiles of crude increased by 6.7 million barrels last week, far higher than predictions from analysts for a gain totalling only 700,000 barrels. News of the buildup in recession-struck United States, the world's biggest crude consuming nation, pushed New York crude down by 5.95 dollars and London Brent oil by 4.67 dollars on Wednesday. "The only thing that can drive oil higher in the short term is geopolitical news because we are loaded with crude," said Phil Flynn of Alaron Trading. "The 6.7 million barrels in crude show supplies of crude are reaching glut-like proportions," he said. The market also remains concerned over higher US jobless numbers and President-elect Barack Obama's mammoth task of stimulating growth. A report on Wednesday said the US private sector lost 693,000 jobs in December, much higher than expected, indicating deepening recession. The report came ahead of Friday's official US payrolls report, which some said could be even bleaker. Oil prices rallied at the start of the week, bouncing back above 50 dollars in London as the energy market was shaken by disruptions to gas supplies across Europe, already troubled by a cold snap. Russia has cut supplies bound for Europe via Ukraine in retaliation for Ukraine's alleged theft of Russian gas. Ukraine denies siphoning off Russian gas and has accused Moscow of engineering the crisis. Oil prices had already risen sharply on Monday as the Israeli-Palestinian conflict intensified. World oil prices fell by about 54 percent in 2008 as a sharp global economic slowdown weighed on energy demand in the second half of the year. However, in the first half, crude futures rocketed to record highs of above 147 dollars a barrel in July on fears of supply disruptions. Towards the end of 2008, prices slumped to just above 33 dollars " the lowest in four and a half years.