Oil extends losses as IMF cuts global growth forecasts
US benchmark West Texas Intermediate for November delivery was down 35 cents at a 17-month low of USD 88.50 a barrel in late-morning trade and Brent crude eased 36 cents to USD 91.75 - lows not seen since mid-2012.
Both contracts tumbled yesterday. Singapore's United Overseas Bank said in a note that prices were being "pressured by reduced economic and demand growth forecasts". The IMF yesterday said the global economy would grow 3.3 per cent this year, down 0.1 percentage point from July's estimate and 0.4 points off its April forecast.
The Washington-based lender also trimmed its 2015 outlook to 3.8 per cent growth from July's 4.0 per cent 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 US, 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 per cent 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.