Oil plunges 3 percent to new five-year lows after bearish IEA outlook
By Barani Krishnan
NEW YORK (Reuters) - Crude oil markets fell 3 percent or more to plumb new five-year lows on Friday after the world's energy watchdog forecast even lower prices on weaker demand and larger supplies next year.
Benchmark Brent oil settled at below $62 a barrel and U.S. crude slumped to under $58 to extend Thursday's landmark fall below $60.
Surging crude inventories in the United States and top oil exporter Saudi Arabia's reiteration that it will not cut production had roiled prices over the last two days despite data pointing to strong U.S. economic recovery.
On Friday, the Paris-based International Energy Agency which coordinates the energy policies of industrialised countries, cut its outlook for demand growth in 2015, triggering another collapse.
The IEA slashed its outlook for global oil demand growth for 2015 by 230,000 barrels per day to 900,000 bpd on expectations of lower fuel consumption in Russia and other oil-exporting countries.
It predicted that oil-producing nations outside of the Organization of the Petroleum Exporting Countries will add to global supplies. It also expected prices to fall further.
"That's just more bad news for the oil markets," said Andrew Lipow, president of Houston-based Lipow Oil Associates.
Brent settled down $1.83, or nearly 3 percent, at $61.85 per barrel. It fell to $61.35 during the session, the lowest since July 2009. Continued...