Oil futures reverse gains after bearish IEA oil market report
Investing.com
Published Oct 13, 2015 05:47AM ET
Crude oil futures turn lower after bearish IEA oil market report
Investing.com - Crude oil futures reversed earlier gains to trade lower on Tuesday, following the release of bearish supply estimates from the International Energy Agency.
In its monthly report released earlier in the session, the IEA warned that oil markets would likely remain oversupplied next year, as oil demand growth slows down amid an expected return of Iranian oil.
The agency cut its forecast for oil demand growth for next year by about 200,000 barrels a day compared to its previous assessment in September.
"A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels--should international sanctions be eased--are likely to keep the market oversupplied through 2016," the agency said.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.
Crude oil for delivery in November on the New York Mercantile Exchange declined 23 cents, or 0.49%, to trade at $46.87 a barrel during European morning hours.
A day earlier, Nymex oil prices plunged $2.53, or 5.1%, following a report that OPEC continued to boost crude production despite a persistent glut.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for December delivery inched down 15 cents, or 0.3%, to trade at $50.08 a barrel. On Monday, Brent futures lost $2.66, or 5.03%.
The oil market has been volatile in recent months amid uncertainty about how quickly the global glut of crude is set to shrink. Despite this tighter outlook for North America, output remains robust in other countries.
Saudi Arabia and other Gulf OPEC members have indicated they will continue to stick to their policy of defending market share by keeping production high.
Oil prices have lost nearly 60% since last summer as lingering concerns over a glut in world markets drove down prices.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $3.21 a barrel, compared to $3.15 by close of trade on Monday.
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Written By: Investing.com
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