By Cassie Werber By Nicole Friedman, Cassie Werber and Sarah Kent
NEW YORK--Crude-oil prices continued to slide on Tuesday after
the International Energy Agency cut its forecasts for oil-demand
growth this year and next.
In its closely watched monthly oil market report, the
Paris-based energy watchdog cut its forecast for 2014 oil-demand
growth by 200,000 barrels a day to just 700,000 barrels a day.
Prices have fallen more than 20% since mid-June as ample global
crude supplies have grown faster than demand.
The Organization of the Petroleum Exporting Countries pumped
more oil last month than it has in 13 months, while non-OPEC
producers added 2.1 million barrels a day in the period, or more
than 2% of global daily demand, the IEA said.
Brent crude oil for November delivery recently fell $1.47, or
1.7%, to $87.42 a barrel on ICE Futures Europe, on track to settle
at a fresh near four-year low. The U.S. benchmark crude recently
fell 69 cents, or 0.8%, to $85.05 a barrel on the New York
Mercantile Exchange.
Weak European economic data also weighed on prices Tuesday.
German economic sentiment unexpectedly slumped in September, and
September inflation data for France, Italy and Spain fell short of
expectations.
The IEA said it sees demand picking up next year, increasing by
an annual 1.1 million barrels a day. But oil supply looks set to
continue growing strongly, the agency said.
"It would appear that involuntary cuts [in production] due to
military activities in Iraq and Libya may be required to slow
downward price momentum," said energy-advisory firm Ritterbusch
& Associates in a note.
The agency's estimated supply growth doesn't include the
possibility of eased sanctions on Iran, which could add more supply
to the global market, said Olivier Jakob of consultancy Petromatrix
in a note. The deadline for the current round of negotiations on
Iran's nuclear program is Nov. 24.
Barclays said it is likely that Brent will hold below $100 a
barrel for a "prolonged period."
Refineries, meanwhile, are taking advantage of the relatively
cheap raw material and are increasing output, said analysts at
Energy Aspects, though this won't solve the problems of
oversupply.
"This will simply transfer the crude overhang to the products
market, as refineries run down their crude stocks and essentially
translate them into products stocks," Energy Aspects wrote in a
note to clients. "Prices will have to go lower to balance this
market."
November reformulated gasoline blendstock, or RBOB, recently
fell 3.60 cents, or 1.6%, to $2.2193 a gallon.
November diesel fell 3.31 cents, or 1.3%, to $2.5237 a
gallon.
Write to Cassie Werber at cassie.werber@wsj.com, Nicole Friedman
at nicole.friedman@wsj.com, Cassie Werber at cassie.werber@wsj.com
and Sarah Kent at sarah.kent@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires