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Oil fell to fresh lows not seen since July 2009 on Friday with Brent crude slipping towards $62 a barrel on concerns over a global supply glut and weak demand.
Brent is down more than nine per cent this week, taking its fall since a June peak above $115 to 45 per cent.
The International Energy Agency (IEA) said oil prices would likely come under further pressure, cutting its outlook for demand growth in 2015 and predicting that non-Opec output gains would increase global supplies.
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The IEA, which coordinates the energy policies of industrialised countries, cut its outlook for global oil demand growth for 2015 by 230,000 barrels per day (bpd) to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries.
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“It spells out the main scenarios that are in the market and said that stockpiles will be substantially bigger in the first half of 2015,” said Bjarne Schieldrop, chief commodity analyst for SEB in Oslo.
Brent was down $1.03 at $62.65 per barrel by 1427 GMT and hit a low of $62.37.
Down 33 per cent already, it is on track for its biggest quarterly drop since the fourth quarter of 2008.
US crude was down $1.21 at $58.74 per barrel, after falling to $58.27, its weakest since May 2009. The contract has lost about 11 per cent this week.
The Organization of the Petroleum Exporting Countries (Opec), which accounts for a third of world oil output, sees 2015 demand falling to its lowest in more than a decade.
“It’s following the trend lower. The market has reacted strongly to the Opec forecast cut, and it is focusing only on the negative,” said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.
He added there was little technical support until $50-$55.
Top energy consumer China released data on Friday showing near-record refinery runs in November, with factory output growth weaker than expected.
High Chinese oil demand, which has remained above 10 million bpd for the past three months, could help provide a price floor.
Remarks by Saudi Arabia’s oil minister reiterating that the kingdom would not cut output, and a surprise jump in US crude and distillate inventories, have also helped drive down prices this week.
Analysts said there was scope for oil to slip further.
“We are getting quite close to excess supplies which could push prompt Brent (prices) down to incentivise traders to store increased volumes of crude on ships, as onshore storage fills up,” Abhishek Deshpande, an analyst at Nataxis told the Reuters Global Oil Forum.
He said oil could briefly fall as low as $40 per barrel.
