Oil Drops After Slower Demand Expected

West Texas Intermediate extended its rout from the lowest price in 22 months after the International Energy Agency said oil demand will expand this year at the slowest pace since 2009. Brent slid to a four-year low in London.

Futures dropped as much as 1.5 percent in New York, the fifth decline in six days. Oil consumption will increase by about 650,000 barrels a day this year, 250,000 below the previous estimate, the Paris-based agency said in its monthly market report. U.S. crude stockpiles probably expanded by 2.5 million barrels to a two-month high last week, according to a Bloomberg News survey before a report from the Energy Information Administration on Oct. 16.

Oil futures have collapsed into bear markets as shale supplies boost U.S. output to the most in almost 30 years and global demand weakens. The biggest producers in the Organization of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will compete for market share rather than reduce supply. Saudi Arabia won’t alter its supplies much between now and the end of the year, a person familiar with its oil policy said on Oct. 3.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza