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Supply glut sends Brent crude to $60 per barrel

Supply glut sends Brent crude to $60 per barrel
The International Energy Agency (IEA) said oil prices would likely come under further pressure, cutting its outlook for demand growth in 2015 and predicting that non-OPEC output gains would increase global supplies.

The growing silent war between shale oil producer America and OPEC is sending jitters around the world as small oil producing countries like Vietnam cannot bear the sustained falling crude prices as it affects their profitability and consequently economy.

The IEA, which coordinates the energy policies of industrialized countries, cut its outlook for global oil demand growth for 2015 by 230,000 barrels per day (bpd) to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries.

"It spells out the main scenarios that are in the market and said that stockpiles will be substantially bigger in the first half of 2015," said Bjarne Schieldrop, chief commodity analyst for SEB in Oslo.
Brent was down $1.03 at $62.65 per barrel and hit a low of $62.37.

Down 33 percent already, it is on track for its biggest quarterly drop since the fourth quarter of 2008.
US crude was down $1.21 at $58.74 per barrel, after falling to $58.27, its weakest since May 2009.

The contract has lost about 11 percent this week.The Organization of the Petroleum Exporting Countries (OPEC), which accounts for a third of world oil output, sees 2015 demand falling to its lowest in more than a decade.

"It's following the trend lower. The market has reacted strongly to the OPEC forecast cut, and it is focusing only on the negative," said Hans van Cleef, senior energy economist at ABN Amro in Amsterdam.

He added there was little technical support until $50-$55.

Oil stocks drag Sensex 251 points down

Mumbai: The benchmark Sensex slumped by 251.33 points to end at 27,350.68 and logged its worst weekly drop in three years dragged down by losses in oil&gas, realty and metal shares, amid continued tumble in oil prices and caution ahead of key macroeconomic data releases later on Friday.

A sluggish European stocks opening and capital outflow concerns also affected market sentiment.
Losses in RIL, ONGC and Gail India weighed on benchmark indices. US oil price fell below the key $60/barrel mark for the first time since July 2009. A sustained drop in oil, which will hit margins of oil related firms, is being seen as a sign of weakness in global economy, traders said.

Besides refinery, realty, consumer durable, capital goods, metal and power shares too were at the receiving end.
Agencies

Agencies

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