Oil prices tumble to four-year low in London

10th October 2014, Comments 0 comments

Brent oil dived to a four-year low point on Friday, extending this week's sharp falls on global economic fears and plentiful crude supplies, analysts said.

Brent North Sea crude for delivery in November tumbled to $88.11 a barrel in Asian trading hours, touching the lowest level since December 1, 2010.

US benchmark West Texas Intermediate (WTI) for November delivery sank to $83.59, a point last witnessed on July 3, 2012.

"Growing oil supplies throughout the world outpacing a slowdown in energy demand continue to put downside pressure on crude prices," said dealer Jonathan Sudaria at trading firm Capital Spreads.

Brent later stood at $89.47 in midday London deals, down 58 cents from Thursday's closing level. WTI changed hands at $84.54, down $1.23.

Both contracts have now plunged by about a fifth in value since striking their 2014 peaks in June.

Crude futures tumbled Thursday as fresh evidence of economic weakness in the eurozone, especially in Germany, added to concerns slowing global growth and abundant oil supplies.

The market accelerated its losses after the head of the International Monetary Fund (IMF) warned the eurozone could slip back into recession.

Friday's losses come as equities markets suffer another heavy sell-off.

Europe's main stock markets fell heavily on Friday, hit by growing signs that the eurozone economy may be at risk from recession and by gloom over the global outlook. Sentiment was also hut by stubborn worries over the Ebola outbreak in West Africa.

A fresh round of negative eurozone data published on Thursday showed a 5.8 percent slump in German exports in August, while leading think tanks also slashed their growth forecasts for Europe's largest economy.

IMF chief Christine Lagarde has meanwhile warned there was a 35-40 percent chance of the eurozone slipping back into recession if action is not taken to prevent it.

The forecast came after the IMF had this week cut its estimates for global economic growth for this year and in 2015.

Oil prices have been dampened also by ample global supplies owing to increased US shale gas production and a return to the market of Libyan oil following a prolonged disruption due to civil unrest.

"The price falls are largely attributed to weak demand and oversupply fears which have been aggravated by global growth concerns and the restoration of Libya's oil production," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

In the United States this week, a closely monitored report showed rising crude inventories, signalling weakening demand in the world's top oil consuming nation.

The Department of Energy said US crude reserves leaped by 5.0 million barrels in the week ending October 3, more than double analysts' consensus forecast.

© 2014 AFP

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