oil

London, Sep 12 (AFP) Commodity prices dropped this week as the dollar strengthened, with Brent oil sinking to its lowest level in more than two years against a backdrop of solid supplies and sluggish demand.

Sugar futures meanwhile touched multi-year lows, weighed down by expectations of a large surplus of supplies.

Brent oil prices dived to USD 96.72 yesterday — touching a low point last seen in 2012 — while WTI hit a 16-month trough at 90.43.

Prices plumbed the latest depths after the International Energy Agency (IEA), which advises on energy policy to industrialised nations, cut its oil demand outlook citing weaker economic growth in Europe and China.

The news followed broadly similar demand forecast downgrades this week from both the US government’s Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC).

The market hit a series of multi-month lows this week on the back of abundant global crude supplies and gloomy demand growth forecasts.

“Oil prices were lower again on ample supply and soft global demand,” said CMC Markets analyst Jasper Lawler.

The Paris-based IEA trimmed its estimate for oil demand this year to growth of 1.0 percent, or 900,000 barrels per day (bpd), from a previous estimate of 1.1 percent or 1.0 million bpd. That takes total demand for the year to 92.6 million bpd.

“Oil demand growth (is) slowing at a ‘remarkable’ pace, the IEA has said in its monthly report today,” said Ole Hansen, head of commodity strategy at Saxo Bank.

“This the final of monthly reports from the big three…

(on the) same theme as what has been said by the EIA and OPEC this week.”

Falling oil prices have sparked market speculation that crude producer group OPEC could call an emergency meeting to halt the slide, a prospect dismissed by cartel member Kuwait.

By today on London’s Intercontinental Exchange, Brent North Sea crude for delivery in October had fallen to USD 97.08 a barrel from USD 101.29 one week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October slid to USD 92.65 per barrel compared with USD 94.05. (AFP)