Oil price at 27-month low

Singapore: Brent crude futures fell below $91 a barrel on Wednesday to their lowest since June 2012, holding to a months-long tumble in prices as lower economic growth forecasts raised new concerns about global oil demand amid rising U.S. inventory levels. The International Monetary Fund (IMF) on Tuesday cut its global economic growth forecasts for the third time this year, warning of weaker growth in core eurozone countries, Japan and big emerging markets like Brazil.

 

While the IMF kept the growth outlook for China, the world’s No.2 oil consumer, unchanged at 7.4 per cent for this year, it saw the risk of a hard landing in the medium term due to concerns over excess industrial capacity and credit issues.Asian investors were worried about overnight economic data from Germany that showed industrial output fell by a larger-than-expected four per cent in August, the biggest drop since the financial crisis in 2009, said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.

 

The fall in output was a more immediate indicator of slowing growth than the Indian Monetary Fund (IMF) figures, Mr McCarthy said.“Growth concerns are on traders’ minds, coupled with the glut in supply. The market is caught in a vortex of high supply and weak demand,” said Ben Le Brun, market analyst at Sydney's Optio-nsXpress. Brent for November delivery fell $1.16 to $90.95 by 0540 GMT, after hitting $90.76 earlier in the session, its lowest point sin-ce June 2012.  Oil prices have trended lower on oversupply and weak demand since mid-June, when Brent hit a nine-month high of $115.71.