— Brent sales $83 pb
— Fears over global weak growth increase
By John Nwokocha
with Agency Report
Oil prices reached new multi-year low points yesterday owing to a supply glut and weak global demand.
Brent struck $83.37 a barrel — the lowest level for nearly four years — and the WTI contract dropped to $80.37, a point last seen more than two years ago.
In later deals, Brent North Sea crude for delivery in November stood at $84.06 a barrel, down 98 cents compared with Tuesday’s close.
US benchmark West Texas Intermediate (WTI) for November was down $1.16 at $80.68.
“For as long as OPEC makes no move to tackle this threat of a massive oversupply by reducing production, prices are likely to continue to fall,” said Commerzbank analyst Carsten Fritsch.
Currently, members of the Organization of the Petroleum Exporting Countries, like kingpin Saudi Arabia, are in fact slashing the prices they charge customers for their crude in order to gain market share.
The International Energy Agency on Tuesday said it expects demand to have risen by just 700,000 barrels per day to 92.4 million barrels per day this year, 200,000 fewer than its previous growth forecast.
Market-watchers have blamed the slump in demand on weak growth in China, the world’s biggest energy consumer, and the eurozone, which some analysts have warned is flirting with recession.
Adding to the pain is an oversupply of the black gold caused by strong US production of shale gas and a return of Libyan oil on to the market after facilities that were closed due to civil unrest resumed operations.
