Reuters with CNBC
Benchmark oil prices fell to new five-year lows after OPEC
cut its demand outlook for global oil consumption and U.S. data showed a
surprise jump in oil inventories.
In a monthly report, the Organization of the Petroleum Exporting Countries forecast demand for the group's oil will drop to 28.92 million barrels per day in 2015, down 280,000 bpd from its previous expectation.
U.S. crude futures for January settled 4.5 percent lower at $60.94 per barrel, the lowest since July 2009.
Brent futures fell by nearly $3 to $64 a barrel, having earlier touched $60.63, a level not seen since July 16, 2009.
The U.S. government's Energy Information
Administration showed U.S. commercial crude inventories climbed 1.5
million barrels last week. Analysts had anticipated a draw down of 2.2 million barrels.
Stockpiles of U.S. crude stood at 380.8 million through the week ending Dec. 5.
Gasoline stocks also rose by 8.2 million barrels, compared with analysts' expectations in a Reuters poll for a 2.5 million-barrel build.
The price of the North Sea oil benchmark has fallen more than 40
percent since June as new supplies of high-quality crude from North
America have fed a glut of fuel in many parts of the world.
"There is a growing realization that the first half of next
year is going to look very weak," said Gareth Lewis-Davies, strategist
at BNP Paribas. "You start to price that in now."
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The U.S. Energy Information Administration cut its
global oil demand growth estimate for 2015 by 240,000 barrels per day
to 880,000 bpd. It forecast oil demand growth this year would be around
Global oil demand has been capped by slowing
economic growth in China as well as stagnation in many more-developed
economies, particularly in Europe.
"The fundamental picture hasn't really changed,
and that is one of supply outstripping demand growth for most of the
year," said Phin Ziebell, a senior analyst at National Australia Bank.
"It's an incessant march downwards, and it would
be interesting to see where it bottoms out, but there doesn't seem to be
any sign of it so far."
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Members of OPEC are divided on how to respond to
the global surplus and falling prices. The cartel may still hold an
emergency meeting before its June gathering, Algeria's energy minister
said on Tuesday.
Italian oil and energy group Eni said OPEC may cut output in the spring and that oil prices will remain between $66 and $75 per barrel next year.
Top oil producer Saudi Arabia blocked
production cuts at the last meeting in November and has taken steps to
shore up its market share
—CNBC.com contributed to this report.