NEW YORK: Brent crude oil futures fell to the lowest level in 15 months yesterday, pressured by the prospect of slowing oil demand growth in China and Europe, while a strong dollar and ample supplies pressured US prices.
Oil prices on both sides of the Atlantic have been in steady decline since the end of June as concerns faded over supply disruptions from Iraq, Libya and Russia. Continued supply from key producing regions and tepid demand has left global markets well stocked.
Brent crude for October delivery fell $1.84 to $100.95 a barrel by 11.59am EDT (1559 GMT), after earlier hitting $100.67, the lowest since May 31, 2013. US crude dropped $2.37 from Friday’s close to $93.59 a barrel. There was no trading in the United States on Monday because of the Labor Day holiday.
“There was some buying going into the long weekend and you are seeing that premium come out,” said Oliver Sloup, Director of Managed Futures at iitrader.com in Chicago. “The dollar is strong today and the US has so much oil and has the capability to produce more.”
The euro sagged yesterday to fresh one-year lows against the dollar on bets the European Central Bank will do more to help a wobbly euro zone economy, while the pound fell to a near five-month low versus the greenback on worries about a Scottish secession.
Further pressure came from the prospect of resuming oil supplies from the Buzzard field in the North Sea and discouraging economic data from Europe and China. China’s factory sector growth slowed to a three-month low last month.
The Buzzard field, the biggest contributor to the Forties oil stream, one of the four crudes that underpin the price of Brent crude oil futures, may attempt another restart later yesterday, after going offline at the weekend.