SINGAPORE — Brent futures slipped to $114 yesterday, falling for a second day, due to worries over the worsening outlook for demand growth, although mounting supply concerns over escalating tension in the Middle East kept losses in check.
Report by Reuters
A poll indicating China may have expanded in the third quarter at the slowest pace since the first three months of 2009, overshadowed data over the weekend, showing an improvement in commodity imports by the world’s second-biggest oil consumer.
Prices were also hurt as the International Energy Agency (IEA) last week cut its demand growth forecast for next year.
Brent crude had slipped 54 cents to $114,08 a barrel by 0427GMT, after sliding 75 cents in the previous session. US oil fell more than $1 to $90,82 earlier in the session and traded 72 cents lower at $91,14.
“China is now shifting to a more moderate growth rate of 7 to 8%, but most investors are seeing it as a negative,” said Tetsu Emori, a Tokyo-based commodities fund manager at Astmax Investment.
“The heating up of tensions in the Middle East and limited spare supply capacity are supporting prices.”
The IEA said ample supply from North America and Iraq, coupled with declining global demand, could ease prices over the next five years.
It also cut its demand growth projection for 2011-2016 by 500 000 barrels per day (bpd) from its previous report and cut its 2013 demand outlook by 100 000 bpd, citing lower consumption in Europe, the Americas and China.
China’s annual growth probably slowed for a seventh straight quarter in the July-September period to the weakest level since the depths of the global financial crisis, a Reuters poll showed. The median forecast of 26 analysts is for the economy to expand 7,4% from a year earlier, down from 7,6% in the second.
Increased tension between Turkey and Syria put the brakes on declining prices, as it threatens to add to a geopolitical crisis over concerns about Iran’s disputed nuclear programme.
In the latest development, Turkey has banned all Syrian aircraft from its air space. The crisis has worsened in the past two weeks because of cross-border shelling and touched a low when Ankara forced down a Syrian airline.