Oil extends losses as IMF cuts global growth forecasts

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SINGAPORE: Oil prices fell further to multi-month lows in Asian trade on Wednesday on demand concerns after the International Monetary Fund (IMF) cut its the global economic growth forecasts, analysts said.

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US benchmark West Texas Intermediate for November delivery was down $1.11 to $87.74 a barrel in afternoon trade and Brent crude eased $1.12 to $90.99. Both contracts tumbled on Tuesday.

Singapore’s United Overseas Bank said in a note that prices were being “pressured by reduced economic and demand growth forecasts.”

The IMF on Tuesday said the global economy would grow 3.3 percent this year, down 0.1 percentage points from July’s estimate and 0.4 points off its April forecast.

The Washington-based lender also trimmed its 2015 outlook to 3.8 percent growth from July’s 4.0 percent as it warned of stagnation in advanced economies.

“Growth this year has indeed disappointed, especially in the US, EU and Japan,” Singapore’s DBS Bank said.

In the United States, the world’s biggest oil consuming nation, “nothing is falling off the cliff,” but while recovery continues “growth there is not accelerating like so many seem to believe.”

It said “Europe and Japan are in more trouble” and that in Europe “the trouble is no longer in the periphery, it’s in the core three countries of Germany, France and Italy.”

The IMF left its forecast for China’s growth this year unchanged at 7.4 percent but warned that the world’s second-largest economy and top energy consumer faces a range of “near-term growth risks,” especially in real estate.

AFP

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