Oil prices extend losses on demand fears

Brent crude fell by $1.61 to $88.44, its lowest level since June 2012

Oil prices sank on Thursday to more than two-year lows as weak economic data from Germany underscored concerns over a global economic slowdown and its impact on energy demand, analysts said.

 

In Asian trade US benchmark West Texas Intermediate for November delivery tumbled $1.49 to $84.87, its weakest level since June 2012.

 

Brent crude fell $1.61 to $88.44, its lowest level since June 2012.

 

The losses come as equities markets suffer another heavy sell-off.

 

Another round of negative eurozone data showed a 5.8% slump in German exports in August, while leading think tanks also slashed their growth forecasts for the eurozone's largest economy.

 

In the United States, a closely monitored report showed rising crude inventories, signalling weakening demand in the world's top oil consuming nation.

 

Meanwhile, prices have also been dampened by ample global supplies owing to increased US shale gas production and a return to the market of Libyan oil following a prolonged disruption due to civil unrest.

 

"Oil tumbled on the back of relentless anxiety about oversupply and waning global demand, sending Brent and West Texas Intermediate hurtling to levels unseen since 2012," Singapore's United Overseas Bank said.

 

Adding to investors concerns, International Monetary Fund chief Christine Lagarde warned Thursday that there was a 35-40% chance of the eurozone slipping back into recession if action is not taken to prevent it. The Fund this week cut its forecast for global growth in 2014 and 2015.