Crude down sharply as IEA pares oil demand forecasts

[LONDON] Brent crude declined to its lowest intraday level in more than two years, and West Texas Intermediate (WTI) to a 16-month low, as the International Energy Agency (IEA) cut global oil demand forecasts for this year and next.

Futures slid as much as 1.4 per cent in London and New York. The IEA cut its world fuel demand estimates following a "remarkable" slowdown in the second quarter that prompted Saudi Arabia, biggest member of the Organization of the Petroleum Exporting Countries (Opec), to pare exports to a three-year low. Futures also dropped after the kingdom's oil minister, Ali al-Naimi, said he's not worried about the price decline.

"Oil prices continue their nosedive," Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report. "Opec already appears to be responding to the threat of oversupply. All the same, further cuts would need to be made by Opec in order to balance the oil market."