Oil extended losses below $60 a barrel in New York and declined to a five-year low as the International Energy Agency cut its 2015 demand forecast for the fourth time in five months. Brent also dropped to the lowest in five years.
West Texas Intermediate futures fell as much as 1.9 percent in New York, poised for a decline of almost 10 percent this week. The IEA reduced its estimate for global oil demand growth in 2015 by 230,000 barrels a day as falling prices hurt producing nations such as
Russia. U.S. output, already at three-decade high, will continue to rise in 2015, the IEA said.
WTI has tumbled 20 percent since OPEC decided to leave its output ceiling unchanged last month, resisting calls from members including Venezuela to cut production to stabilize prices. Saudi Arabia, Iraq and Kuwait, the group's three biggest members, this month deepened discounts on shipments to Asia, bolstering speculation that they're fighting for market share.
"The race to the bottom continues," Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. "The IEA report confirms that the negative momentum currently seen is not going away unless we begin to see signs of supply destruction."
WTI for January delivery dropped as much as $1.15 to $58.80 a barrel, the lowest since July 2009, in electronic trading on the New York Mercantile Exchange and was at $59.03 at 10:44 a.m. London time. Total volume was about 48 percent above the 100-day average for the time of day. Prices have decreased 40 percent this year.
Brent for January settlement slid as much as 93 cents, or 1.5 percent, to $62.75 a barrel on the London-based ICE Futures Europe exchange, also the lowest since July 2009. The European benchmark crude traded at a premium of $3.89 to WTI, compared with $3.23 at the end of last week. Prices are down 8.8 percent this week and 42 percent lower in 2014.
The IEA, the Paris-based adviser to 29 nations, boosted projections for supplies outside OPEC in 2015 by 200,000 barrels a day, forecasting output will expand by 1.3 million barrels a day to 57.8 million a day.
OPEC, which supplies about 40 percent of the world's oil, maintained its output target at 30 million barrels a day at a Nov. 27 meeting. Venezuela wants special discussions to be held before the group gathers on June 5, Foreign Minister Rafael Ramirez said on the Telesur network on Dec. 10.
The global oil market will correct itself, Saudi Arabian Oil Minister
Ali Al-Naimi said Dec. 10 in Lima, Peru.
Production in the U.S. expanded to 9.12 million barrels a day through Dec. 5, the fastest rate in weekly records that started in January 1983, data from the Energy Information Administration show.
"The supply outlook has driven prices to these levels and the market is now looking for a base, where it thinks shale supply growth will be reined in," Mark Keenan, Singapore-based head of commodities research for Asia at Societe Generale SA, said by phone today. "From a technical standpoint, the market is in a very clear downtrend."
The IEA cut projections for the amount of crude OPEC will need to provide next year by 300,000 barrels a day to 28.9 million. OPEC gave the same forecast, the lowest since 2003, in its monthly report on Dec. 10.
OPEC's 12 members pumped 30.56 million a day in November, exceeding their collective target for a sixth straight month, a Bloomberg survey of companies, producers and analysts showed.