Oil prices slumped on the New York and London markets on Sept. 10 following reduced global oil demand forecasts from the Organization of Petroleum Exporting Countries and the US Energy Information Administration.
On Sept. 11, the International Energy Agency also issued a monthly report citing low demand and high supply.
Oil prices have been "weighed down by abundant supplies and further indications of slow global economic and oil-demand growth," IEA said.
IEA reduced its forecast for 2014 oil demand growth for the third consecutive month, saying it now expects global oil demand will grow by 900,000 b/d this year.
The IEA Oil Market Report (OMR) for September trimmed global oil demand growth for 2015 to 1.2 million b/d. The agency cited a pronounced slowdown in global oil demand growth this year, which it attributed largely to Europe and China.
EIA’s 2015 global oil demand forecast is now set at 93.8 million b/d, the OMR said.
Ole Hansen, head of commodity strategy at Saxo Bank, noted that rising supply and demand-growth worries have put energy commodities under pressure.
“The Bloomberg commodity index, with its one-third exposure to each of the three major sectors of energy, metals and agriculture, has fallen by 4.3% in the past month while the S&P GSCI Index, which has a 70% exposure to the energy sector, has dropped by almost 5% during the same time,” Hansen said in reference to the commodity price index published by Standard & Poors. Previously, the S&P GSCI was the Goldman Sachs Commodity Index.
“All sectors, apart from livestock, have seen losses mount during this time, not least the energy and metal sectors in which the combination of rising supplies, a strong dollar, lower inflation expectations, and slowing economic growth have all played their part,” Hansen said.
Separately, a government report issued Sept. 11 showed US gas storage levels rising but still below typical levels for this time of year.
EIA estimated working gas in underground storage was 2.8 tcf as of Sept. 5. This represented a net increase of 92 bcf from the previous week.
Gas storage levels were 443 bcf less than last year at this time and 463 bcf below the 5-year average of 3.26 tcf, EIA said in the weekly gas storage report.
Energy prices
The New York Mercantile Exchange October crude oil contract dipped by $1.08 to $91.67/bbl. The November contract slumped by $1.05 to $90.84/bbl.
The natural gas contract for October gave up 3¢ to a rounded $3.95/MMbtu. On the US cash market, gas at Henry Hub, La., was $3.96/MMbtu, up 2¢.
Heating oil for October delivery was down 3.82¢ to a rounded $2.75/gal. Reformulated gasoline stock for oxygenate blending for October delivery dropped 2.19¢ to a rounded $2.53/gal.
The October ICE contract for Brent crude delivery was down $1.12 to $98.04/bbl. The November Brent contract declined $1.15 to $98.78/bbl. The ICE gas oil contract for September dropped $16 to $831/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 10 was $95.93/bbl, down $1.06.
Contact Paula Dittrick at [email protected].
