Brent crude turns lower as weaker demand view weighs

100 Million Barrels The World Hit a Daily Oil and Liquids RecordMore

100 Million Barrels The World Hit a Daily Oil and Liquids RecordMore

The monthly report by the International Energy Agency (IEA) on Friday weighed on crude markets.

Oil markets look "adequately supplied for now" after a big production increase in the last six months, but the industry is coming under strain, the West's energy watchdog said on Friday.

Supply from Iran during September dropped to a two-and-a-half year low, the IEA said, as customers continued to cut back in the run-up to new sanctions, which start on November 4.

Brent crude fell $1.55, or 1.9%, to $81.54 USA a barrel late Thursday morning, off the session low of $81.14, its weakest since September 26.

McTeague says there are a number of other factors also driving down prices, including a large refinery shut down in the USA that usually buys a lot of Canadian crude.

"The market absorbed some effects of sanctions on Iran and the oil prices are more likely to go up 120 to 130 USA dollars per barrel, that require the export from Iran would go much lower, " said Richard Nephew, senior research scholar with Center on Global Energy Policy of Columbia University.

"Both global oil demand and supply are now close to new, historically significant peaks at 100 mb/d, and neither show signs of ceasing to grow any time soon".

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The monthly report from the Organization of the Petroleum Exporting Countries showed the 15-nation producer group's output rose by 132,000 bpd in September to almost 32.8 million bpd.

"Oil bulls are bearing the brunt of another bruising session as yesterday's selling frenzy intensifies", said Stephen Brennock, analyst at London brokerage PVM Oil.

Global equities were set for their biggest daily gain in almost a month.

'A rebound in equity markets would help Brent to rebound from $80, ' said Olivier Jakob, analyst at Petromatrix, adding that a dip below $80 on Thursday did not clearly break that level as a source of technical support. In the US Gulf of Mexico, companies cut output by 40% on Thursday because of Hurricane Michael, even as some operators began returning crews to offshore platforms.

Michael crashed ashore Florida on Wednesday as the third most powerful hurricane to strike the USA mainland.

In fact, production has surged, led by the United States shale revolution, and supported by big increases in Brazil, Canada and elsewhere, according to the IEA.

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