Oil dives $4 as demand dims, shale booms and OPEC resists cuts reuters/article/2014/10/14/markets-oil-idUSL2N0S31MJ20141014 NEW YORK, Oct 14 (Reuters) - Oil dived more than $4 a barrel on Tuesday, its biggest drop in more than two years as mounting evidence of slackening demand and unrelenting U.S. shale output left traders struggling to peg a floor for crudes four-month rout. The abrupt acceleration of an over 26 percent slide in prices since June was triggered by three news items that epitomized the markets turn: a downgrade in global oil consumption forecasts; projections for another big boost in shale oil; and reluctance by OPEC members to cut output. Brent crude for November fell $3.85 to settle at $85.04 a barrel after a late lurch lower knocked prices to below $85 a barrel for the first time since 2010. It was the biggest one-day drop since 2011. U.S. crude fell $3.90 a barrel to settle at $81.84, its biggest percentage fall in about two years. Oil is struggling to find a floor after Saudi Arabia made clear that it was focused on maintaining market share, not supporting prices with unilateral production cuts. Other members appear to be taking a similar tack. A source familiar with oil policy in Iran, normally one of the first in OPEC to call for production cuts, followed Kuwait in saying there was no need to rein in supplies. Some oil traders are now looking for downside targets at $80 or below. On Sunday, Kuwaits oil minister said that oil prices might stop falling at around $76 or $77 a barrel. Saudi Arabia privately told oil market participants last week that it was comfortable with lower prices, possibly down to $80 Brent. The slide began early in the day after the International Energy Agency, the Wests energy watchdog, cut its estimates for global oil demand growth by 250,000 barrels per day for this year and by 90,000 bpd for 2015. It said demand for OPEC oil would be 200,000 bpd lower for both years. The diminishing outlook for consumption is colliding with an unrelenting rise in U.S. shale oil, leading to a glut of crude that has knocked Brent lower since June. Losses deepened in mid-afternoon after the U.S. Energy Information Administration projected that fast growing shale basins would increase output by some 106,000 bpd in November from a month earlier. Germanys economy could shrink in the third quarter, but any recession, as defined by two or more consecutive quarters of declining output, should not last long, the chief economist of think tank ZEW said. Investors were looking ahead to weekly U.S. data on oil and product inventories for price direction.
Posted on: Wed, 15 Oct 2014 12:26:10 +0000
Trending Topics
Recently Viewed Topics
© 2015