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Oil lower on supply glut fears

Dec 13 2012 07:59 AFP
Oil barrel

Oil barrel (Picture: Shutterstock )

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Singapore - Oil prices fell in Asia on Thursday after Opec warned of an oversupply as uncertainty surrounds the outlook for the global economy, analysts said.

New York's main contract, light sweet crude for delivery in January fell 14 cents to $86.63 a barrel in the afternoon and Brent North Sea crude for January delivery shed 24 cents to $109.26.

The losses came after "preliminary warnings from the cartel that downside demand risk was increasing", said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst and Young.

"Markets continue to be overshadowed by concerns of looming oversupply next year with limited demand growth."

The Organisation of Petroleum Exporting Countries (Opec) - which produces more than a third of the world's oil - said on Wednesday in Vienna that it was holding its oil output ceiling at 30 million barrels per day (mbpd) due to demand uncertainties.

"Indeed, the biggest challenge facing global oil markets in 2013 is uncertainty surrounding the global economy, with the fragility of the eurozone remaining a major concern," it said in a statement.

"World oil demand is forecast to increase slightly during 2013, this is likely to be more than offset by the projected increase in non-Opec supply" such as from the United States.

"Projected demand for Opec crude in 2013 is expected to contract to 29.7 mbpd."

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opec  |  commodities  |  markets  |  oil
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