Opec cuts oil demand forecast

London

World crude prices slid yesterday, pressured by the long-standing issue of oversupplies as OPEC cut a demand forecast for next year.

US benchmark West Texas Intermediate for delivery in October shed $1.37 to $44.55 a barrel compared with Friday’s close.

Brent North Sea crude for October dropped $1.03 to stand at $47.86 a barrel in London afternoon deals. The cost of oil had already tumbled last week after Goldman Sachs slashed its price forecasts for next year in the face of a larger-than-expected glut.

On Monday, the OPEC oil cartel cut its forecast for global oil demand growth in 2016 as emerging markets, the motor of world growth in recent years, splutter.

Better-than-expected growth in the United States and the eurozone prompted the Organization of the Petroleum Exporting Countries to nudge up its forecast for world oil demand growth this year to 1.46 million barrels per day to 92.79m bpd.

However OPEC cut its 2016 forecast to a 1.29m bpd gain to 94.08m bpd “due to the projected slower economic momentum in Latin America and China”.

Weak demand from China, the world’s top energy consumer, is particularly weighing hard on the market, with another round of weak data from the world’s number two economy heaping further pressure.

Analysts said dealers were focusing also on the US Federal Reserve’s interest-rate meeting, which ends Thursday.

While expectations are for a rise by the end of the year, the bank’s decision has been complicated by the recent turmoil across the globe caused by the Chinese economic crisis.