Brent crude fell to the lowest level in almost four years after the International Energy Agency said oil demand will expand this year at the slowest pace since 2009. West Texas Intermediate slipped for the fifth time in six days.
Futures dropped as much as 3.1 per cent in London and 2.1 per cent in New York. Oil consumption will rise by about 650,000 barrels a day this year, 250,000 fewer than the prior estimate, the Paris-based agency said in its monthly market report.
US crude supplies probably grew by 2.5 million barrels last week, according to a Bloomberg survey of analysts before a report from the Energy Information Administration on October 16th.
Oil futures have collapsed into bear markets as shale supplies boost US output to the most in almost 30 years and global demand weakens. The biggest producers in the Organisation of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will compete for market share rather than trim output.
Saudi Arabia won’t alter its supplies much between now and the end of the year, a person familiar with its oil policy said on October 3rd.
“The IEA report is killing Brent,” Bob Yawger, director of the futures division at Mizuho Securities USA in New York, said by phone. “This is the fourth month in a row where they’ve cut their demand forecast. There’s tremendous downside risk for the market.”
Brent for November settlement declined $2.54, or 2.9 per cent, to $86.35 a barrel on the London-based ICE Futures Europe exchange at 10:24 am in New York. It slipped to $86.17, the lowest intraday price since December, 2010.
Bloomberg
