By Jessica Resnick-Ault
NEW YORK (Reuters) - Global oil prices plunged further on Tuesday, with Brent crude falling almost 3 percent to another post-2010 low after the West's energy watchdog cut its estimates for oil demand this year and next.
The global oil benchmark has fallen 25 percent from its 2014 high in June as supplies have risen and global demand has slowed, creating a glut in many markets. Adding to the bearish tone on Tuesday, a source familiar with oil policy in Iran, normally one of the first in OPEC to call for production cuts, followed Kuwait in saying there was no need to rein in supplies.
The International Energy Agency, which advises industrialized countries on energy policy, cut its estimates for global oil demand growth by 250,000 barrels per day for this year and by 90,000 bpd for 2015. It said demand for OPEC oil would be 200,000 bpd lower for both years.
With OPEC powerhouse Saudi Arabia intent on protecting market share, rather than slowing the price slide, many analysts saw little to prevent a deeper rout.
"Recent price drops appear both supply and demand driven," the IEA said in its monthly oil market report. "Further oil price drops would likely be needed for supply to take a hit - or for demand growth to get a lift."
Brent crude for November, which expires on Thursday, fell $2.37 a barrel to $86.52 after touching its weakest point since December 2010.
U.S. crude fell $2.10 a barrel to $83.64 after it pared sharp intraday losses on Monday to settle down 8 cents.
The heavily traded Brent/WTI spread was volatile over the day, first narrowing to under $2 a barrel, near its lowest in over a year, before widening back out to $3 later in the day as U.S. oil futures deepened losses.
WEAK EUROPE WEIGHS BRENT
The IEA's supply forecast is "piling on" already weak economic data from Europe, said analyst Phil Flynn of Prices Futures Group in Chicago. "Numbers out of Europe show deflationary pressures are extending even into the UK."
Germany's economy could shrink in the third quarter, but any recession, as defined by two or more consecutive quarters of declining output, should not last long, the chief economist of think tank ZEW said on Tuesday.
Investors were looking ahead to weekly U.S. data on oil and product inventories for price direction.
U.S. commercial crude stocks were estimated to have increased in the week ended Oct. 10, while refined products are likely to have fallen, according to a Reuters survey ahead of the inventory reports out of the world's biggest oil consumer. The reports will be out a day later than usual this week.
(Additional reporting by Florence Tan, Christopher Johnson and David Sheppard; Editing by Jason Neely, Lisa Von Ahn and Paul Simao)
