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Oil prices fall further as oversupply concerns continue

Crude oil prices fell in European trade on Wednesday morning despite signals from the International Energy Agency that energy demand is massively on the increase, as high supply in the near term continued to weigh on prices.

"The latest signals from the physical market do not bode well for crude prices," said analysts at JBC Energy in a note to clients.

Brent has slipped to four-year lows in the past day, dipping below $US80.50 a barrel Tuesday, a level last seen in September 2010.

JBC said there is little in the pipeline likely to relieve downward pressure. Economic factors are making the shipment of crude from the North Sea to South Korea less attractive. "Without the Asian option to relieve the pressure of growing supplies, the overhang in the Atlantic Basin will grow longer, eventually putting...pressure on Brent," the analysts said.

The IEA's annual World Energy Outlook, released on Wednesday, forecast an increase in global energy demand of 37 per cent by 2040.

In oil markets, which are currently oversupplied in part due to a shale boom in the US, "The short-term picture of a well-supplied oil market should not disguise the challenges that lie ahead as reliance grows on a relatively small number of producers," the IEA said.

December Brent crude on London's ICE Futures exchange is down 40 cents at $US81.27 a barrel. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December is down 60 cents at $US77.33 a barrel.

Recently, ICE gas oil for November changed hands at $US728.25 a metric ton, up $US3.25. Gasoline was down 71 points to $US2.0965 a gallon.

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Published on:
November 12, 2014
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