Oil Under Pressure, IMF Cuts Global Growth Forecast David McNew/Getty Images

Oil Under Pressure, IMF Cuts Global Growth Forecast

The International Monetary Fund Tuesday sharply cut its 2015-2016 world growth forecast of only six months ago.

Oil diverged Tuesday, remaining under pressure as the International Monetary Fund slashed its world economic growth forecast and stoked demand fears.
In London deals, Brent North Sea crude for delivery in March added two cents to $48.86 a barrel.  

US benchmark West Texas Intermediate for February dipped $1.28 to trade at $47.85 per barrel.

"Crude oil prices remain under heavy pressure with WTI front month futures retreating ... following news that the IMF cut its global growth forecast by most in three years," said Sucden analyst Myrto Sokou.

We see no near-term catalysts that would change the supply/demand equation. - Moody's

"Brent front month futures fluctuated ... amid concerns regarding a further slowdown of global oil demand."

The International Monetary Fund on Tuesday sharply cut its 2015-2016 world growth forecast of only six months ago.

It said poorer prospects in China, Russia, the euro area and Japan would hold world growth to just 3.5% this year and 3.7% in 2016.

That was 0.3 percentage points lower than in its previous World Economic Outlook in October, and underscored the steady deterioration of the economic picture for many countries.

Crude futures had fallen in earlier Asian trading hours, hit by weak global demand and an oversupply.

"We see no near-term catalysts that would change the supply/demand equation," credit ratings firm Moody's said in a market commentary.

It said the drop in crude prices by more than half between June last year and this month reflected an increase in U.S. production, a slow rise in worldwide demand and oil kingpin Saudi Arabia's decision "not to keep acting as OPEC's -- and the world's -- swing producer".

Saudi Arabia is the major producer in the Organization of the Petroleum Exporting Countries (OPEC) cartel, which decided in November to leave crude output unchanged, further pressuring prices.

Moody's said it has lowered its price assumptions for Brent crude to $55 a barrel through 2015 and $65 in 2016.

It also lowered its price assumption for WTI to $52 a barrel through this year and to $62 in 2016.

Copyright Agence France-Presse, 2015

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