Crude prices continue to fall on Wednesday as the West Texas Intermediate (WTI) was trading below the 17-month low on Tuesday as the market await a report that may show that crude stockpiles increased in the US, the world’s biggest consumer. Meanwhile, Brent declined to the lowest level since June 2012 after the International Monetary Fund (IMF) cut its global economic growth outlook.
The International Monetary Fund (IMF) reduced its global economic growth outlook and said it projects the global economy to grow 3.8% next year, down from the previous forecast of 4% made in June, while this year’s world economy growth is expected to come in at 3.3%.
Futures for the North American West Texas Intermediate (WTI) for November delivery traded 1.23% lower to $87.76 per barrel on the New York Mercantile Exchange at the time of writing. While the European benchmark Brent crude for November settlement declined 1.20% to trade at $91.01 a barrel on the ICE Futures Europe exchanged based in London.
Crude Stockpiles report
A report from the industry-funded American Petroleum Institute showed that crude oil inventories in the US increased by 5.1 million to 360 million in the weekend October 3.
A separate report from the Energy Information Administration (EIA) is expected to be released later in the day and may show supply increased by 2 million barrels in the previous week. The EIA also adjusted its forecast for WTI prices from previous estimates of $94.67 per barrel issued in September to an average of $94.58 per barrel next year. While Brent crude estimates for next year is expected to be seen at $101.67 per barrel, compared to the previous forecast of $103 per barrel.
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The slowing growth in China and Eurozone is expected to diminish the global oil demand. Last week WTI declined by 4.1% after Saudi Arabia reduced crude prices for November exports to Asia, while the Organization of Petroleum Exporting Countries (OPEC) increased production in September.
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