Tags: Commodities | energy | oil | price

Oil Slumps to Two-Year Low on Downgrade of Demand Forecast

Thursday, 11 Sep 2014 01:51 PM

Global oil prices hit a two-year low Thursday after the International Energy Agency cut its forecasts for world demand, with the market also weighed down by plentiful supplies, analysts said.

In earlier London trade, Brent North Sea crude for October sank to $96.72 per barrel, the lowest point since July 2, 2012.

And U.S> benchmark West Texas Intermediate for October delivery slid to $90.43, a level last seen on May 1, 2013.

"Oil prices were lower again on ample supply and soft global demand," said CMC Markets analyst Jasper Lawler.

Brent oil later stood at $97.48, down 56 cents from Wednesday's close, while WTI rebounded slightly to $91.91, up 24 cents.

The market has forged a series of multi-month lows this week on the back of abundant global crude supplies and gloomy demand growth forecasts.

Prices plumbed the latest troughs on Thursday after the Paris-based IEA, which advises on energy policy to industrialized nations, cut its global oil demand outlook, citing weaker economic growth in both Europe and China.

 

 

The IEA trimmed its estimate for oil demand this year to growth of 1.0 percent, or 900,000 barrels a day, from a previous estimate of 1.1 percent or 1.0 million barrels. That takes total demand for the year to 92.6 million barrels.

The news followed broadly similar demand forecast downgrades this week from both the US government's Energy Information Administration and the Organization of the Petroleum Exporting Countries.

"Oil demand growth (is) slowing at 'remarkable' pace, the International Energy Agency has said in its monthly report today," said Ole Hansen, head of commodity strategy at Saxo Bank.

"This the final of monthly reports from the big three... (on) same theme as what has been said by the EIA and OPEC this week."

Falling oil prices have sparked market speculation that crude producer group OPEC could call an emergency meeting to halt the slide.

However, cartel member Kuwait said Thursday there was no need to call such a meeting.

"So far, we are confident that prices have not dropped to the extent that makes us call for an emergency meeting," Oil Minister Ali al-Omair told reporters.

 

 

Inenco analyst Dorian Lucas added that OPEC would nevertheless be concerned that oil was falling further below its target.

"Oil prices have fallen below the OPEC preferred level of $100 on concern of weakening demand and ample supplies, which has prompted raising speculation of whether Saudi Arabia, OPEC's largest producer, would reduce output," said Lucas.

"Yesterday Saudi Arabia informed OPEC that it had in fact reduced its output to 400,000 bpd in August, which is likely to slow recent Brent crude downside momentum going forward."

OPEC on Wednesday trimmed its 2014 demand outlook by 50,000 barrels, predicting it would now grow by 1.05 million barrels a day to 91.2 million barrels this year.

Demand in 2015 is expected to grow 1.19 million barrels a day, 20,000 barrels fewer than before, the cartel added.

© AFP 2017

 
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Global oil prices hit a two-year low Thursday after the International Energy Agency cut its forecasts for world demand, with the market also weighed down by plentiful supplies, analysts said.
Commodities, energy, oil, price
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2014-51-11
Thursday, 11 Sep 2014 01:51 PM
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