Brent crude dropped for the third consecutive day by 11 cents to reach $108.15 a barrel, in the wake of International Energy Agency’s (IEA’s) further cuts to its demand outlook for the fourth quarter and 2013, over a rebound in oil exports from sanctions-hit Iran.
US crude, however, gained by seven cents to reach $85.45, reported Reuters.
The agency data indicated that the Iranian oil output rose by around 70,000bpd to 2.7 million barrels per day (bpd) in October 2012, putting further pressure on prices, which are struggling due to the tough economic situations in the US and Europe.
Estimated demand cuts for the fourth quarter are by around 300,000bpd, which the agency forecasts to grow by 670,000bpd this year and by 830,000 in 2013 to 90.4mbpd, marking 100,000bpd less than last month.
US lawmakers have started discussions to conclude a deal that would avoid the jolt of $600bn in deficit-reduction measures.
President Barack Obama supports the extension of the individual income tax rates for 98% of Americans, but he is not ready to extend them for the top two percent of earners.
Republicans, on the other hand, are not willing to support increase of any tax. International lenders offered more time to Greece, without disbursing any aid, to fix its budget.
The Federal Energy Information Administration’s (EIA) weekly data has showed an increase of 1.9 million barrels in US crude oil inventories, while the major Sandy-hit East Coast refineries are yet to resume normal operations.
A further decline in Brent crude was capped by increased supply concerns from the Middle East region, on which the US and Europe have imposed tough sanctions to force Iran to halt its controversial nuclear programme.
Image: Tehran oil refinery. Image courtesy of National Iranian Oil Company (NIOC).