BUSINESS

Crude oil hits 5-month low near $93 a barrel amid expected rise in US supplies

11/12/2013 03:39 EST | Updated 01/23/2014 06:56 EST
NEW YORK, N.Y. - The price of oil sank two per cent Tuesday, hitting a five-month low, as the market anticipated another increase in domestic supplies.

Benchmark West Texas Intermediate crude for December delivery fell $2.10, or 2.2 per cent, to close at US$93.04 a barrel in on the New York Mercantile Exchange. Oil has dropped about nine per cent in the past month.

Expectations for another increase in U.S. crude supplies weighed on prices.

Data for the week ended Nov. 8 is expected to show an increase of 1.8 million in crude oil stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. That would mark the eighth straight weekly increase.

Markets also digested reports from the International Energy Agency and the Organization of Petroleum Exporting Countries.

The Paris-based IEA said China and India would turn Asia into the world's main driver of energy demand in coming years, while the United States is expected to be able to meet its energy needs from domestic sources by 2035.

OPEC, headquartered in Vienna and representing some of the world's largest oil exporters, including Saudi Arabia, Venezuela and Nigeria, kept forecasts for demand for its crude this year and next unchanged from a month ago but warned there were still risks to growth.

"Although the global economy continues to improve, the pace of growth remains sluggish and near-term developments will need close monitoring," OPEC said in its monthly report.

Brent crude, the international benchmark, slipped 64 cents to US$105.54 a barrel on the ICE exchange in London.

In other energy futures trading on Nymex, wholesale gasoline lost one cent to US$2.59 a U.S. gallon (3.79 litres), heating oil slipped four cents to US$2.85 a gallon and natural gas advanced four cents to US$3.62 per 1,000 cubic feet.

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