BENCHMARK Brent crude oil yesterday fell to a two-year low as increasing supply and signs of weakening demand countered worries that conflicts in the Middle East could curb output.
The price fell as low as $96.72 (£59.57), its lowest level since July 2012, as the International Energy Agency (IEA) yesterday cut its global oil demand estimate for 2015 to 93.8m barrels per day (bpd).
A sharp fall in the price of oil in August has continued into September, with the price pushed down by “plentiful crude supply and further indications of slow global economic growth,” according to the IEA.
The comments from the IEA in its September Oil Market Report yesterday also saw it highlight economic stagnation in the Eurozone and slowing oil demand growth in China as key factors hitting demand.
Describing the recent slowdown as “remarkable”, the IEA also cut its global oil demand growth projections for 2014 and 2015, down to 0.9m bpd and 1.2m bpd respectively.
Global oil supply was 92.9m bpd last month, down 400,000 bpd on July, but up 810,000 bpd on August 2013.
Last month, leading Opec producer Saudi Arabia cut its oil exports to the lowest level since 2011, though Libya offset some of that decline with a strong production increase in August, with output at 800,000 bpd already in early September despite ongoing conflict in the country.
Meanwhile, non-Opec supply is set to increase by 1.6m bpd in 2014 and 1.3m bpd in 2015, as the IEA highlighted the “relentless growth” in unconventional oil supply, such as fracking, from north America.