Oil prices plumb lows on growth concerns
AFP
AFP, LONDON: World oil prices hit the lowest levels for almost 2.5 months this week as a poor global growth outlook added to concerns over a
long-running supply glut.
US benchmark West Texas Intermediate (WTI) struck $43.69 a barrel on Wednesdaythe lowest level since May 10.
On Friday, Brent North Sea crude slid to a near 2.5-month low point at $45.26 a barrel.
A rally seen in early July is tapering off and the markets are starting to feel the effects of a supply glut again, said Alex Wijaya, a trader at CMC Markets.
Crude had risen from near 13-year lows below $30 in February to above $50 in June owing to fires in Canadas key oilfields, unrest in key producer Nigeria and the start of the US driving season. However, with those issues now fading and dealers fretting over Brexit, prices have softened again.
The US Department of Energy on Wednesday reported that the countrys commercial crude stockpiles fell by 2.3 million barrels last week, offsetting a surprise rise in gasoline inventories during the peak demand season for American motor fuel.
Weve seen a little bit of a surprise in how much decline in oil there was, said Bert Melek at TD Securities.
Before the US inventory report, prices had already fallen on renewed strength for the dollarmaking the commodity more expensive for buyers holding weaker currencies.
And prices were weighed down by a downbeat forecast from the International Monetary Fund, which lowered its global growth forecasts, citing the impact of Britains vote to exit the European Union.
The IMF said it expects the world economy to expand 3.1 percent this year, lower than it forecast in April. Slower overall growth would likely dampen the expansion of crude oil demand. In China, which is the worlds biggest energy consumer, its premier on Friday said the world could not depend on the country to save it from a Brexit-induced downturn.
