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Oil down on lower demand forecast, Greece crisis

Associated Press Modified: November 13, 2012 at 7:46 am •  Published: November 13, 2012

The price of oil slipped to near $85 a barrel Tuesday as the International Energy Agency lowered its forecast for oil demand and said global supplies were growing.

By early afternoon in Europe, benchmark oil for December delivery was down 44 cents to $85.13 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 50 cents to finish at $85.57 per barrel on the Nymex on Monday.

The IEA said in its monthly oil market report that it had cut slightly its expectations of how much oil the world will need this year to 89.6 million barrels a day, 80,000 barrels a day less than its forecast from a month ago, on persistent economic weakness in Europe and the impact of Hurricane Sandy in the US.

The Paris-based agency also said global oil supply rose 800,000 million barrels a day in October, to 90.9 million barrels a day, "as rebounding supplies from the Americas and the North Sea offset a slight decline in OPEC crude supplies."

The IEA also said that Iran's oil output had broken a string of seven straight months of declines as China and South Korea appeared to be importing more crude from the Islamic Republic. Iran has been hit by hard economic sanctions by the West over its nuclear program.

Crude oil prices were also affected by renewed uncertainty over debt crisis in the European Union.

Greece's international creditors failed to agree Monday on how to get the country's bailout program back on track. They will meet again on Nov. 20 to continue discussing the release of the next batch of rescue loans totaling €31.5 million ($40 billion).

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