Market Overview

Crude Oil Falls To New Lows On EIA Demand Growth Forecast

Share:
Crude Oil Falls To New Lows On EIA Demand Growth Forecast

Brent crude oil made its way marginally above $63 on Friday after falling to a more than five-year low earlier in the morning. The commodity traded at $63.07 at 9:15 GMT with the growing global supply glut and a lack of demand growth continuing to weigh.

Reuters reported that the International Energy Agency cut its forecast for oil demand growth through 2015 by 230,000 barrels per day, citing lower fuel consumption in non-OPEC nations as a major reason for the decline. The forecast added to growing pressure on crude prices as it confirmed that supply will outpace demand next year.

Related Link: France May See Rating Downgrade By The End Of The Day

Meanwhile, economic data from China, the world’s second-largest consumer, suggested that the nation’s economy was grinding to a halt. November factory output growth dipped more than expected, growing just 7.2 percent annually compared to October’s 7.7 percent. Investment growth also declined to a near 13-year low.

Though some of OPEC’s members are still calling for a production cut in order to raise prices, Saudi Arabia has been firm in its stance that it will not decrease production unless oil producing nations outside of OPEC agree to cut down as well. The lack of cohesion within the cartel has effectively pitted its members against each other in a price war.

Kuwait lowered its prices for Asian buyers to its lowest level since December 2008, while Saudi Arabia discounted prices for customers in both the United States and Asia. The ongoing battle for market share indicates that the group will not agree to a production cut any time soon as the cartel’s members look likely to accept the commodity’s low prices for an extended period.

Posted-In: News Commodities Forex Global Markets Best of Benzinga

 

Related Articles (BNO + BROAD)

View Comments and Join the Discussion!

UPDATE: Morgan Stanley Reiterates On Yum! Brands Following Analyst Day

France May See Rating Downgrade By The End Of The Day