Crude oil dips below $100, sweetens after 14 months

London: Brent crude oil, the European benchmark, dropped on Monday to less than $100 for the first time in more than 14 months on a strong supply situation despite unrest in producer regions. Brent hit $99.72 a barrel to record its lowest level since June 24, 2013 after coming under pressure in recent weeks also from easing demand growth expectations. The price of Brent has fallen by more than 13 percent since June 19, when it reached a nine-month high point of $115.71 a barrel amid major unrest in key crude producer Iraq.

In midday deals, Brent North Sea crude for delivery in October had recovered to stand at $100.10 a barrel, down 72 cents compared with Friday’s close. US benchmark West Texas Intermediate for October dropped 54 cents to $92.75 a barrel. Lower oil prices benefit companies and households while impacting revenues for producer countries, including those who together comprise the OPEC cartel. Saxo Bank analyst Ole Hansen said Chinese data had helped to push oil prices lower on Monday. “China’s crude imports for August showed a year-on-year decline while export of fuel exceeded imports for the fourth time this year.

This is adding to the current negative sentiment which continue to be driven by rising supplies at a time of slowing seasonal demand,” he added. Last month, OPEC trimmed its 2014 forecast for global oil demand growth after weaker-than-expected economic growth in rich countries in the second quarter and amid what it described as a fragile worldwide recovery. A disappointing US jobs report published last Friday meanwhile tempered sentiment about demand in the world’s top crude consumer.