Oil prices at five-year low as IEA cuts demand forecast
Oil prices have plunged to a fresh five-year low after the International Energy Agency reduced its outlook for global oil demand. The benchmark New York oil price slipped further below $60 a barrel in early Friday trading.
A man walks away from an oil derrick near Williston, N.D. Oil prices closed at a five-year low Thursday before plunging even further on Friday.
Gregory Bull/AP/File
LONDON
After closing at a five-year low Thursday, oil听prices听fell further Friday after the International Energy Agency lowered its forecast for global听oil听demand next year.
In its monthly听oil听report, the agency said global听oil听demand in 2015 will grow by 900,000 barrels a day 鈥� 230,000 less than previously forecast 鈥� to 93.3 million.
"While demand growth is still expected to gain momentum in 2015 from 2014, the acceleration is now looking more modest than previously foreseen, in line with the ever-more tentative pace of the global economic recovery," the IEA said.
Following its report, the benchmark New York听oil听price听slipped further below $60 a barrel to fresh five-year听lows. In late morning trading in London, it was 72 cents lower at $59.23. Brent, the international standard, was 74 cents lower at $62.94.
The IEA said several years of record high听prices听have "induced the root cause" of the rout in听oil听prices听in recent months 鈥� the surge in non-OPEC supply to its highest growth ever and a contraction in demand growth to five-year听lows. The fall in听oil听prices gathered pace in late November when OPEC left its output target unchanged.
The agency also dampened expectations that the fall in听oil听prices听will automatically be a boon for the global economy.
"The adverse impact of the听oil听price听rout on oil-exporting economies looks likely to offset, if not exceed, the stimulus it could provide for oil-importing countries against a backdrop of weak economic growth and听low听inflation," the IEA said.
听
It highlighted the impact on Russia, which has been particularly hard hit by the market sell-off.
"[A]round the world the dramatically lower prices are having an adverse affect on the economies of oil producing countries from Russia to Iraq," the Monitor's Ken Kaplan wrote Friday, "with some analysts saying even that the decline in the purchasing power of the ruble and living standards in Russia could pose a political peril for President Vladimir Putin."听