Brent oil dropped to the lowest level since June 2012 after the International Monetary Fund cut its global growth forecasts. West Texas Intermediate fell before data that’s projected to show a U.S. crude supply gain.
Futures dropped as much as 1.5 percent in London and 1.6 percent in New York. The world’s economy will expand by 3.8 percent next year, down from a forecast of 4 percent in July, the Washington-based IMF said in a report yesterday. U.S. crude stockpiles rose by 2 million barrels last week, according to a Bloomberg survey of analysts before data from the Energy Information Administration today.
“Fears about a weakening economy and the impact that will have on demand are moving us lower,” Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, said by phone. “We’re hunting for a bottom here.”
Brent for November settlement slipped 91 cents, or 1 percent, to $91.20 a barrel on the London-based ICE Futures Europe exchange at 9:01 a.m. in New York. Prices fell to $90.76, the lowest intraday level since June 26, 2012. The volume of all futures traded was 39 percent above the 100-day average for the time of day. Prices are down 18 percent this year.
WTI for November delivery decreased $1.04, or 1.2 percent, to $87.81 a barrel on the New York Mercantile Exchange. Futures touched $87.39, the lowest level since April 18, 2013. Volumes were 55 percent higher than the 100-day average. The U.S. benchmark crude traded at a $3.34 discount to Brent, compared with $3.26 yesterday.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.