Oil hits two-year low below $ 97 as supplies build

Friday, 12 September 2014 01:45 - - {{hitsCtrl.values.hits}}

Reuters: Brent crude dropped to a two-year low below $97 a barrel on Thursday, falling for a sixth straight session as worries over mounting supply and weak demand outweighed concerns that conflicts in the Middle East could curb oil production. North Sea crude oil hit a high above $115 in June as Islamist insurgents swept across northern Iraq, taking control of several oilfields, but prices have now fallen more than 15% from their highs as supply from other countries has increased much faster than demand. The West’s energy watchdog said on Thursday slowing global economic growth, particularly in China and Europe, had curbed oil demand severely at a time when supplies were growing steadily, particularly from North America. “The recent slowdown in demand growth is nothing short of remarkable,” the International Energy Agency (IEA) said in a monthly report, cutting its oil demand growth projections for 2014 and 2015. Brent for October fell $1.32 to a low of $96.72 a barrel, its weakest since July 2012, before recovering slightly to trade around $96.90 by 1121 GMT, after closing down $1.12 in the previous session. US crude was down $1.14 at $90.53 a barrel. The IEA expects non-OPEC supply to expand by 1.6 million barrels per day (bpd) in 2014, and by another 1.3 million bpd in 2015, thanks mainly to the North American shale oil boom. That means the world will need less oil from the Organization of the Petroleum Exporting Countries, and the IEA cut its estimate of demand for OPEC crude and stocks for 2015 by 300,000 bpd to 29.6 million bpd. In August, OPEC pumped 30.31 million bpd. OPEC has also cut its estimates of demand for its own crude this year and the next, pointing to a surplus of more than 1 million bpd in 2015 if the group keeps output at current levels.