Oil Continues Drop After Weaker Demand

Brent crude slid for the fifth time in six days on concern weaker economic growth will reduce demand. West Texas Intermediate fell before inventories data.

Futures extended losses after the U.S. Energy Information Administration cut its 2014 and 2015 crude price forecasts because of rising output and reduced demand. The International Monetary Fund cut its outlook for global growth in 2015. U.S. crude inventories expanded by 2 million barrels last week, a Bloomberg News survey showed before government data tomorrow.

“The dire economic condition is really worsening,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The market is worried about the global economy and that’s where the selling pressure is from. The EIA’s been saying that production is kind of outpacing demand.”

Brent for November settlement declined $1.11, or 1.2 percent, to $91.68 a barrel at 12:09 p.m. New York time on the London-based ICE Futures Europe exchange. The volume of all futures traded was about 14 percent above the 100-day average. Brent touched $91.25 yesterday, the lowest intraday level since June 2012.

WTI for November delivery fell 85 cents, or 0.9 percent, to $89.49 a barrel on the New York Mercantile Exchange. Volume was 1 percent above the 100-day average. WTI slid to $88.18 on Oct. 2, the lowest since April 2013. Brent traded at a $2.24 premium to WTI on ICE.

Front-month Brent futures’ 14-day relative strength index was at about 25 today, data compiled by Bloomberg show. That’s a sixth day below 30, signaling the market is oversold and further losses probably can’t be sustained.

via Bloomberg

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