NEW YORK: Global oil prices plunged further yesterday, with Brent crude falling almost 3 percent to another post-2010 low after the West’s energy watchdog cut its estimates for oil demand this year and next.
The global oil benchmark has fallen 25 percent from its 2014 high in June as supplies have risen and global demand has slowed, creating a glut in many markets. With Opec powerhouse Saudi Arabia intent on protecting market share, rather than slowing the price slide, many analysts saw little to prevent a deeper rout.
Brent crude for November, which expires on Thursday, fell $2.37 a barrel to $86.52 after touching its weakest point since December 2010. US crude fell $2.10 a barrel to $83.64 after it pared sharp intraday losses on Monday to settle down 8 cents.
The heavily traded Brent/WTI spread was volatile over the day, first narrowing to under $2 a barrel, near its lowest in over a year, before widening back out to $3 later in the day as US oil futures deepened losses. The IEA’s supply forecast is “piling on” already weak economic data from Europe, said analyst Phil Flynn of Prices Futures Group in Chicago. “Numbers out of Europe show deflationary pressures are extending even into the UK.” Reuters
