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Oil prices have fallen because of the gloomy IEA forecasts

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Oil prices have fallen because of the gloomy IEA forecasts

Oil prices have fallen because of the gloomy IEA forecasts
September 13
16:00 2016

On Tuesday oil prices have fallen because of the gloomy forecasts of the demand increasing. Such expectations signals that surplus of stocks in the global markets will persist longer than it was expected.

According to the International Energy Agency (IEA), the sudden braking of the increase in global demand of raw materials and the redundant reserve stocks with the growth of supply may mean that the oil market will be oversupplied for at least 10 months.

This forecast of the agency is contrary to the previous one. Last month the agency published a forecast that the supply and demand would be relatively stable until the end of the year and reserve stocks would rapidly decline.

The IEA statement was made immediately after the unexpectedly gloomy forecast from the OPEC, made public on Monday.

By mid-day futures contracts for Brent crude oil were being traded at $ 47.40 per barrel. This is 1.90 percent lower than the previous closing mark.

Contracts for the US WTI crude oil have fallen by 2.33 percent and amounted to $ 45.21 per barrel.

Eugen Weinberg from Commerzbank said: “It seems that the situation has become worse in the eyes of the OPEC and the IEA.”

Traders report that the information about the industrial production growth in China in the last months could not support oil quotes, despite the optimistic data. This happens because the oil market does not stop profit-taking.

The industrial production in China increased very fast in August. This has happened for the first time over five months, as the demand for diverse products was restored at the expense of increasing the government costs as well as the lending and real estate peak, which is being observed throughout the year.

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