RG: Oil Falls to Post-2010 Low after IEA Cuts Demand Forecasts
LONDON, Oct 14 (Reuters) – Brent crude fell to a fresh low below $88 a barrel on Tuesday, trading at the weakest level since 2010 after the West's energy watchdog cut its estimates for oil demand this year and next.
The global oil benchmark has dropped almost 25 percent from its 2014 high in June as supplies have risen and global demand has slowed, creating a glut in many markets.
The International Energy Agency said on Tuesday world oil demand growth would be much weaker than previously expected and raised questions about OPEC's willingness to rein in supplies, suggesting oil prices may drop further.
"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 dropped $1.30 to $87.59, its weakest point since December 2010, before recovering slightly to around $87.81 by 1112 GMT.
U.S. crude dropped $1.01 a barrel to $84.73 after it pared sharp intraday losses on Monday to settle down 8 cents.
The IEA, which advises industrialised countries on energy policy, cut its estimates for global oil demand growth by 250,000 barrels per day (bpd) 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.